iOS 6.1 Beta 5 was released to developers yesterday and there is a reference to 128GB capacity devices in the SystemPartitionPadding key in the release manifest. This reference has apparently been absent from previous releases, so perhaps it is an indicator of things to come.
However (grain of salt time), this is not conclusive in any way, shape or form. There have been hints in the past, and as we mentioned, we have not seen any devices or specs even approaching the subject. Having written that, seeing a 128GB iOS device seems highly unlikely to us, at least as far as the iPhone is concerned. Given the premium price-point of the iPhone, based on current pricing schemes, a subsidized 128GB iPhone would cost $500 and would list full retail for about $950. We do not expect that market research would return a favorable impression to that prospect. Then again, the iPhone's pricing scheme has not hurt sales of the device at all.
However, such a storage option on an iPad could make more sense, where a Wi-Fi only 64GB iPad retails for $699 and a 4G/LTE model comes in at $829. Such a price premium would be easier to absorb with the bigger hardware. Of course, all of this is conjecture, but over time we have seen our high-tech devices get faster and leaner, with many of them able to hold a lot more “stuff.”