I agree that they should have done away with the 16GB and started with 32GB. It's funny how not too long ago someone else said that nobody would ever need more than 640MB on a PC... my how times have changed.
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Now 640mb is not even one file... That is what I like about Apple, they constantly increase the memory on the phones, 128gb, next 256gb.
Even though on a pc you go into the TB and PBytes, for a tablet and iPhone I think for now 128gb is ok, I would not get any lower capacity though.