Because like I say, most costumers opt for the 32 GB model with a case, so in a way the 16 GB model would be more of a way of enticing them in. This is way better than merely keeping the price at $499 and making the entry level iPad 32 GB. And what better time to reduce the price by $100 when you're on top. This would cement their position and would burn the competition alive. Tallest, is that you?