When you send an Outlook email with more than 250KB of images to a iPhone, the iPhone email app will treat all images over that as file attachments, displaying them at the bottom of the email message when downloaded.
When you paste images into an Outlook email, or use Outlook’s insert picture command, the image will actually be embedded into the email content as a file attachment. When sending email to other Outlook users these image “file attachments” will display as inline images and not be shown as attachments or have attachment icons.
However, when you send to other email programs such as Hotmail, Gmail or an iPhone, the images will show up as file attachments. Recipients may see a blank or gray box where the images should be, but have the images display at the end or bottom of the email when the recipient clicks to download attachments.
This behavior primarily occurs when the images are embedded, not referenced. By default iPhone and iOS devices are set to automatically download email images and attachments, however, this is also a user setting (Settings > Mail > Messages > Load Remote Images > Off ) which, if turned off, will also prevent referenced images from downloading and displaying automatically.
By default, PoliteMail is configured to reference images when they are added into your page using the PoliteMail > Add Image tool (the image will be uploaded to the PoliteMail app server and hosted, with an https reference to it contained in the HTML page). Referenced images keep your email file size small, and mobile devices will display them in the page and not treat them as file attachments.