This week Apple announced versions of its popular iPhone and iPod touch with twice the flash-RAM storage capacity of the previous top-of-the-line models.  The new 16GB iPhone retails for $499, with the “old” 8GB model holding its ground at $399.  The new 32GB iPod touch retails for $499, while the original 8GB and 16GB “touches” will retain their $299 and $399 price points, respectively.  All are available immediately from Apple stores and other retailers.

So, what’s the deal?  Doesn’t Apple know there’s a recession looming (at least according to those who have the most to gain from generating fear in the electorate)?  If 16GB of storage already holds 2500 of my favorite songs or a dozen of my favorite movies, why do I need twice that storage?

Here’s the deal (as I see it).  The iPhone is not just a phone.  The iPod touch is not just an iPod.  Both these products were designed to be much bigger than they are today.  Not bigger in physical stature, but bigger in function and capability.

Both the iPhone and iPod touch are, in their essences, mini mobile Mac computers.  The operating system that powers them is a modified version of Mac OS X.  They speak exactly the same language as the Mac, whether it’s the Safari web browser, Mail or Calendar applications, Google Maps, and, yes, even iTunes.

This isn’t a revolutionary idea.  Windows Mobile 6 is a stripped down version of Windows.  However, while Windows Mobile brings everything that’s wrong with Windows to your mobile phone, the iPhone and iPod touch bring everything that’s right with the Mac.

And it’s going to get better.  Later this month, Apple will release an iPhone/iPod touch Software Development Kit (known as an “SDK”).  The SDK will open up Apple’s mobile platform to third-party software engineers who will undoubtedly write all kinds of applications for what has become, in just six month’s time, the second largest player in the U.S. mobile device market.  RIM (the Blackberry folks) control the market with a 41% share.  Apple follows with 28%, which is 7% greater than all Windows Mobile vendors combined.

So, for Apple’s mobile platform to continue to grow, they need more room.  More room for memory-hungry new applications.  More room for data storage.  More room for an ever-expanding movie rental catalog.

And just as with computers, the day will come soon when original iPhone users will wonder how they ever got by with only 4GB or memory.