Some of the early leaked details note that the iPhone 7 may not have revolutionary new features, but will improve in some currently needed areas such as memory and battery life 

http://www.forbes.com/sites/gordonkelly/2016/05/30/iphone-7-32gb-storage-option/#794153407a47

Should you be excited about the iPhone 7? Widespread leaks argue new iPhone will be boring yet controversial. Headline features like Apple Pay and 3D Touch are what Apple finds most exciting.  For users the most important changes are typically far more practical such as better battery life and more storage.

The news comes from Kevin Wang, director of market research at respected analytics giant IHS Technology. Wang took to Weibo to announce IHS supply chain investigations have found the iPhone 7 (and presumably the iPhone 7 Plus/Pro) will come with 2GB RAM and 32GB of entry level storage. Apple may try and counter this by making 128GB and 256GB the new mid and top level storage options, but I can still see 32GB proving to be ‘enough’ for many mainstream users. Similarly the knock-on effect of a 128GB midranger would likely make the top end 256GB edition wholly unnecessary for most people.

As such the move to 32GB would be a risk. But does Apple have a choice?  Personally I’d argue it is no longer credible in 2016 to sell a smartphone with 16GB of storage for $650 and after Apple’s sales hit with the iPhone 6S it may be forced to move with the times.