[gkanapathy]

Apple doesn't keep the base model small to save costs. They do it to increase revenue (and margins).

The cost to go from 16GB to 32GB is inconsequential. (They upped the step-up from 32GB to 64GB with no increase in price.) In fact, the cost to them from 16GB to 64GB is probably inconsequential. It's certainly nothing near the $100 in price.

The reason they keep it at 16GB is to make more people upgrade to 64GB. If the base model was 32GB, far fewer people would upgrade to 64GB, precisely because you would no longer have an unacceptably bad user experience.

[rwmj]

In other words, it's about hating your poorer/cheaper users? Wouldn't it be a better strategy to do the right thing for the customers, which I guess in this case would mean having only one model, with a useful amount of storage?

[nkurz]

In other words, it's about hating your poorer/cheaper users?

It's not about hate, it's that Apple is a for-profit company whose goal is to maximize their profit. They've decided that many of those poorer users will choose to sacrifice something else in their life and give the difference to Apple.

Wouldn't it be a better strategy to do the right thing for the customers

Are you suggesting that an approach that better met the needs of their less well-off users would have increased their profitability? No, almost definitely not. I don't like Apple, but their current strategy definitely works for them.

Measured by the metric of profit, Apple is inarguably one of the most successful companies in the history of the world. If so, can you point to any companies who gotten better results from the "put customers first" strategy than Apple has has with theirs?

Most likely what you mean is that the world as a whole would be a better place if Apple pursued some other strategy than profit-maximization. I'd personally agree with this, but it's also difficult to come up with solid examples.