[smackfu]

It just means that the 16 GB iPhone 4S is worth $100 more to people than the 8 GB iPhone. Since I assume most people buying one are coming from the 3GS after their 2 year contract is up. The 4S is certainly not going to get iPhone 4 users to upgrade early for an extra couple hundred bucks.

[ugh]

I’m not really sure whether that’s Apple’s goal in the first place. Realistically the vast majority of people is not going to buy a new phone every year. Apple is not selling the iPhone to a handful crazy devotees, those are (at least by now) clearly a tiny minority. Consequently it doesn’t seem wise to optimize everything for one-year upgrade cycles.