Almost everyone I know was bumping up to the 16GB limit on their iPhones, largely because by this point people have 2-4 years worth of photos on their devices.

If Apple moved to 32/64/128, nearly everyone would have gotten the base model. Instead, for the first time ever, people like myself, and even my mother, decided to bump up to the next tier, which is not only plenty of room for most, but 4x the storage instead of 2x (actually, it's an even higher multiplier when you factor in the storage for the OS itself).

In other words, margins.

My wife burns through 2 gigs a month with photos.

The actual profits for making people pay so much for 64 gigs is crazy.

My cynical view is that this is a way to increase the price of the iPhone without it seeming like it.

For example, in the past I've always purchased the "base" model. First 8GB then 16GB. But now, for me, 16GB is probably 1/2 my ideal storage size, so I'd probably purchase the more expensive 64GB model.

The new "base" model is effectively $100 more expensive.

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.

I was in the same boat. Instead of buying an iPhone 6, I saved $250 (500 vs 750) and got a Z3 Compact instead.

It's not perfect (the camera is garbage in low light), but it has a MicroSD slot, fits in my hand, and costs a lot less. And I can pick what app I want to use for web browsing, mailto: links, maps, etc.

I'm betting Apple finally concedes default apps in iOS 9, but I don't see them ever adding expandable storage.

I have only ever gotten the 16GB iPhone and I have about 4GB left on the one I have now. They didn't bump it because it is the most popular configuration. That said, I have no idea why the 32GB didn't become the base except maybe "cost".

Apple knows that no one would buy the mid range if 32GB was the base option. 32GB is the sweet spot for most users but I doubt Apple wants to get up the $100.

Remember that hardware sales are what Apple is making the most money off of.

Not everyone needs masses of storage on their phone - I know I don't. I'd rather not pay a premium price for an extra 16GB of storage I don't need.

That may be true, but I'm willing to bet that most people are going to buy the cheapest iPhone they can get, specs be damned. Then, within a short time, they've filled up the available storage, can't take pics, update software, etc and it becomes a headache.