Seriously, with how NAND prices have gone down since the iPhone went to a 16GB base model (in 2010 IIRC) 16GB of NAND flash costs less than a third of what it did then. The fact that Apple is still sticking with a 16GB base model is absolutely inexcusable. It's greed and that's all there is to it.
It's not rocket science. It's pricing strategy. The 16GB model exists for three reasons:
1. The iPhone 6 is a much more expensive phone to make than past models. Raw parts for previous models were around $200; all signs point to over $250 for the 4.7" this time. To cover that large jump, Apple floated the idea of a $100 base price increase earlier this year, and it didn't go well.
2. Since they couldn't make the entry point $299/749 without backlash, they needed to convince customers to move up to that middle model voluntarily so they can make their margins.
3. Et voila. Four times the storage for $100 is just enough to convince a large number of people to embrace the new $299/749 price while still providing a $199/649 option for customers who care about nothing but the price.
I am mad because I was really looking forward to this phone. I want it very badly. But Apple is trying to screw people, as if iPhone users are absolute morons and won't notice it. I for one will not abide it.
Settle down. You're still getting more than you were before; you're just not getting it as quickly as you'd like. The first $100 got you 16GB last year; this year it gets you triple that. The second $100 covered 32GB; this time, it's double that.
They didn't increase the 16GB configuration because they don't really want people to buy that one. Putting 32GB in it would have made it more attractive and shifted ASP away from their target. You could call that being a greedy seller, but you can also call it being a cheap customer. Apple has been fairly consistent and direct about its margins and about the customers it wants to serve.
I have been a loyal Apple customer since my first iPhone in 2007. If I decide to upgrade this year it will be the first time in 7 years that it won't be an iPhone.
Plenty of great Android options out there.