(Disclosure: I work for Google, but these are my personal opinions.)
Apple yet again shipped a flagship phone with 16GB storage, which is insufficient. More iPhone users buy the base model than any other model, and many of those buyers will be unhappy that Apple sold them a phone that doesn’t work well, and that they don’t have space for their live photos and Ultra HD video. Just 40 minutes of Ultra HD video will fill up a 16GB iPhone. Pissing off your customers, who trusted you, is not the path to success.
Apple should have also labeled the phone with the usable capacity , which is 12GB for a 16GB phone. If you’re never going to make use of the 16GB to store your photos, music or data, then it’s more accurate to label it 12GB .
Then, Apple should provide everyone buying their hardware 1TB of free quota on iCloud . It’s not that expensive — it costs only $7 a month on OneDrive, at retail prices. And Apple will pay less than retail prices.
Providing a terabyte of free storage will serve several purposes. It will alleviate to some extent the problem of insufficient local storage, which is a problem for both 16GB iDevices and 128GB Macbooks. Cloud storage is reliable, backed up, and always available, and usable from all the Apple devices a user may have. Having the data stored on iCloud, rather than Google Drive or OneDrive, will also be to Apple’s advantage, since that makes the user more likely to buy Apple in the future.
In summary, Apple shouldn’t sell 16GB iDevices. They should label their devices with the amount of usable space. And all Apple customers should get a terabyte of free iCloud storage.
 After upgrading to the latest OS, which it might not have shipped with.
 OS updates can hypothetically reduce the free space. Apple can’t foresee the future, so let’s not ask them to take that into account. Or, better, they can set aside a 1GB buffer for an increase in size in the future, and label the iPhone 11GB.
 Valid for 5 years, for Mac and iPad buyers, and maybe 3 years for iPhone buyers, given the quicker upgrade cycle of iPhones.