[dhm]

I think it's a huge hit to their brand image with consumers if this is true, because they haven't sold woefully underprovisioned current-model-year iPhones before, at least that I can recall.

I have heard the argument that they offer the smaller storage devices for institutional bulk purchase (think high school iPads with a narrower range of use cases and a managed and/or limited base of installed software), but if that's the case they should stop offering those models to consumers in general.