It's simple, really. It's because people still buy them! Case in point; a coworker of mine has been saying for months that he needs to get a new phone to replace his dying iPhone 5. He's been trying hard to hold out for the 7, but his phone has really had a hard life and it wasn't going to make it. So he bit the bullet and bought an SE. We were talking about it and I asked him what capacity he bought and he said 16GB. "Oh? A lot of people find that to be too limiting now," I said. He looked somewhat puzzled and replied, "That's what I've always bought." He went on to explain that he doesn't keep photos on his phone, preferring to transfer them to his PC right away. He streams most of his music and says he's selective about what he stores locally. He's a smart guy but he's not a tech enthusiast, and I don't think he's ever given much thought to storage on his phone. My point is that I think my colleague represents a lot of consumers. Am I trying to say that Apple should stick with a 16GB entry model? NO! It's not going to cost them much to bump it up to at least 32. But I think that a lot of people here forget that there are many people out there who are actually satisfied with 16GB.