This is standard for all storage devices and it always has been. Even though you're seeing a 16GB or 500GB or 1TB storage capacity, it's NEVER the full amount due to formatting or, in this case, the OS and preloaded bloatware. I've never seen this as an issue since I'm always aware that you don't get the full allotted amount of space for your drive. On a 16GB phone, yeah, losing almost a third of the space due to formatting and such seems a little much and I also worried about this since I was coming from a 32GB phone before. But with the SD card, it's not even an issue for me anymore as I still have over 9GB left on my phone and 30GB left on my card