iphone stuck on preparing to transfer & issues with storage

smartcookie_01,

Let's continue with trying to restore from your computer. When you plug in your new iPhone, do you have the option to transfer your data to your new iPhone?

Please complete these steps to help resolve the storage error you're seeing when you attempt to restore:

1. "Make sure your Mac or PC is up-to-date. If you're using iTunes, make sure that you have the latest version of iTunes.
2. Connect your device to your computer with a USB cable, and locate your device on your computer. If your device doesn't appear in Finder or iTunes, learn what to do. If you forgot your passcode or your device is disabled, learn what to do. 
3. Restart all your devices.
4. If you use a Mac, skip this step. If you use a Windows PC and iTunes won't respond or your backup never finishes, you might need to update, change, disable, or uninstall your security software.
5. If you own more than one computer, try to make a backup on your other Mac or PC. Or, use iCloud to back up your device and restore from your iCloud backup.
6. If you see an alert that says an error occurred, your backup is corrupt or incompatible, or there's not enough disk space, find your error message below to learn what to do next.
7. Contact Apple Support."

Additional information is here If you can't back up your iOS or iPadOS device to a computer or restore it from a backup - Apple Support

Take care.

Hi smartcookie_01,

Let's start by making sure the we are viewing the correct storage on the device. Sometimes the device storage and iCloud storage can get confusing since both storage settings look similar. The steps below will walk you through viewing your device storage.

Check the device storage on your iPhone or iPad

1. "Open the Settings app.
2. Tap General.
3. Tap iPhone Storage or iPad Storage to check the amount of device storage that you've used."

This information can also be found here: What's the difference between device storage and iCloud storage? - Apple Support

Also, if you'd prefer to use Quick Transfer to transfer the content, then let's make sure we are getting it done properly by completing the steps listed here: Use Quick Start to transfer data to a new iPhone or iPad - Apple Support that can also be found below.

1. "Turn on your new device and place it near your current device. Follow the onscreen instructions to get started. If the prompt to set up your new device disappears from your current device, restart both devices.
2. Connect your device to Wi-Fi or your device's cellular network.
3. You might be asked to activate your cellular service.
4. Set up Face ID or Touch ID.
5. Choose how you want to transfer your data.

• If you download from iCloud, your apps and data download in the background so that you can start using your new device right away.
• If you transfer directly from your previous device, you'll need to wait for the transfer to complete on both devices before you can use them.

6. Keep your devices near each other and plugged in to power until the data migration process is complete. Transfer times can vary based on factors such as network conditions and the amount of data being transferred."

Best regards.