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I love this type of comment...where, just because YOU don't need or want something, you assume nobody else does.
I agree. Not everyone is the same. For example, I had to delete some files in order to put on new files on because my 16GB was full. I have a large music collection that I want to keep on my phone at all times. Without all my music I start to become bored of the collection I do have at the time.

Playing music in the background at work all day five times a week can easily make a person bored of repetitive songs when they are played too often during the week. It's nice to have a very large collection of music for that purpose.

I have a few games that are over 1gb in size and a bunch more that are 500mb+. High end iOS games are getting huge and 16gb isn't enough.
It's not just games that are creating bigger apps. With the new retina displays the apps are getting larger to support the larger resolution. If someone has enough apps they might find that the apps alone take up more space than they used to.

If the iPhone 5 has a larger megapixel camera, it naturally will take up more data space, so with more things taking up more space even moderate users might find that 16GB not might be enough. It does depend on each person's usable habits though. I know, for me, 16GB is too small already and the problem is only going to get worst when apps and other features use up more data space.

I also don't use the cloud much either because I don't have a large data plan and my internet is not very reliable. For people like me using the cloud is a less practical option. Also I would rather not pay a lot more per month on a larger data plan just to stream my music or movies when it's much cheaper in the long run to have it all on my iPhone.
 
64 GB is more then enough for a phone. I have around 16 with a 64GB class 10 on my Galaxy S3 and barely scratched the 35 GB mark. That's with over 300 apps, tons audio books and movies at around 800 to 1 GB each.

Smartphone means more than a phone, people having various usage of it...
My itunes library is 300 GB large and I have many large email boxes with attachments, i would welcome a 256 GB model including space provided via SD slot
I actually would go for first phone providing such space!

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I listen to music 5-6 hours a day minimum and I'm also a DJ so yes I need as much music as possible with me at all times, I suppose my situation is quite unique.

I am no DJ but 2 to 3 hours per day at least listening to music
 
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