Why do 16GB iPhones and iPads still exist? Enterprise and ASP

Many people were upset when it was announced that the iPhone 6 and iPad Air 2 base models would have the same 16GB of storage as their predecessors. 16GB fills up very quickly with photos, apps, music, and videos. At least Apple doubled the amount of storage available at higher prices from 32GB to 64GB and 64GB to 128GB for an extra $100 or $200, respectively. I believe there are two reasons for doing this that go hand-in-hand.

16GB should be sufficient for many types of office workers performing common tasks such as phone calls, email, messaging, document editing, etc. Same goes for students with iPads. Cost-conscious IT managers buying in bulk for large institutions may not justify paying extra for storage that won't be used for business (or educational) needs. This may also apply to some consumers that use their devices for web browsing, social networking, and media streaming.

Meanwhile, consumers that want extra space may be more inclined to upgrade now than if the base model had been increased to 32GB. If more people upgrade, this would increase the iPhone ASP (average selling price) and presumably gross margin, something that has traditionally been very difficult to do with computing products that tend to get less expensive over time.

In summary, Apple is keeping the 16GB base models around to keep their costs lower and margins higher for users that don't need lots of storage, and I believe this applies to institutions in particular. Meanwhile, we feel like we get more value out of upgrading than we did in the past, which has resulted in higher ASPs and revenue for Apple.