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adriane23 said:
A 16GB model isn't too far fetched considering the cost of large HDD's is pretty low nowadays. There isn't any point in offering a large HDD for a budget model. I got a 1TB HDD for $100.00 about 3-4 months ago.

I agree. The HDD is currently the most expensive component in the PS3, possibly only matched by the slot loading BD drive, so eliminating that and replacing it with less than $10 worth of NAND flash memory would make the PS3 a lot cheaper to produce. 

It becomes really evident when you pay about $100 for a larger HDD and compare that with a console that currently only retails for $249.