Apple to Cut iPhone 3GS Price to Free With Next Update?

MacRumors · Jun 29, 2011

With talk of Apple seeking to release a cheaper iPhone being revived in recent days, RBC Capital Markets analyst Mike Abramsky now weighs in to report that he believes that Apple will be keeping the iPhone 3GS around even after the next iPhone hardware update, offering the device for free with a two-year contract and at $399 for unsubsidized purchases. Apple currently sells an 8 GB iPhone 3GS for $49 on a two-year contract and $449 unsubsidized.

As its entry-level iPhone strategy, Apple is expected to cut iPhone 3GS to $0 (on contract, $399 unsubsidized) in conjunction with iPhone 5 launch (we continue to expect it in September). This approach is intended to target mid-market smartphone buyers and counter Android's mid-market expansion. We expect iPhone 5 to launch at $199/$299 ($599/$699 unsubsidized), and Apple to drop iPhone 4 pricing to $99 ($499 unsubsidized).

The claimed $399 price point for the unsubsidized iPhone 3GS is a bit higher than other reports have been hinting at, with the analyst report from earlier this week suggesting that Apple would try to come in at $349 for its cheaper iPhone.

Earlier reports had claimed that Apple was working on a smaller iPhone form factor that could allow the company to offer the device for as little as $200 unsubsidized. But while some rumblings of a new, smaller iPhone option for this year continue to float around, Abramsky believes that the "baby iPhone" will not be released until 2012, in part to fully take advantage of iCloud leverage that may not be possible as the service debuts.

Article Link: Apple to Cut iPhone 3GS Price to Free With Next Update?

dethmaShine · Jun 29, 2011

Recent:

dethmaShine said:
- Essential for markets where pre-paid/post-paid plans are very popular. Among best examples would be markets like: India, China, Malaysia, etc.

I belong to India and I'm aware that almost every person who buys a phone is on a post-paid [per monthly] or a pre-paid plan. But both these plans do not include the cost of the phone. You've got to buy the phone yourself. $350 sounds like a great price for such a market.

- Lets be honest: not everyone affords an iPhone. I used to have an iPhone but at present I use Mozart7. I got a couple of Trophy7s for mom and my aunt.
Why? - work like an iPhone -- touch screen ... but cheaper than the iPhone. An iPhone 4 would have cost me close to £500. I got the other two for a total less than £500.

- Not everybody carries an expensive phone. If I were to gift a phone to my little brother or probably my girlfriend, I'd buy a cheaper - non-iPhone model. If a cheaper option was there, I wouldn't have been bothered at all.

iPhone has to become cheap overtime if Apple needs to take care of some more people. They are going good with whatever they have but if they need to aggressively compete, they need a cheaper iPhone.

This is news:

http://9to5mac.com/2011/06/29/apple-gunning-for-android-in-india-with-unlocked-iphone-3gs/

Not the most reasonable price, but we shouldn't forget: this is Apple!

Apple has divulged plans to relaunch its iPhone 3GS, which was then only available through network operators like Vodafone and Airtel. The new unlocked version will come with 8GB internal storage at a very reasonable price of 19,990 Indian rupees (about $444). Apples latest iOS version 4.3 supports iPhone 3GS, making it a worthy opponent to similarly-priced Android devices with better hardware. Apple has also said that iOS 5 will work on iPhone 3GS though it is likely that not all features will be supported.

Something seems going.

bushido · Jun 29, 2011

lol america

i can already get the iPhone 4 for free with a 2 year contract

dethmaShine · Jun 29, 2011

bushido said:
lol america

i can already get the iPhone 4 for free with a 2 year contract

Source? Link?

Chundles · Jun 29, 2011

Meh, my iPhone 4 is free on a two year contract.

wordoflife · Jun 29, 2011

dethmaShine said:
Source? Link?

In Europe, mainly countries like the UK (and even Canada ... yes I am aware that is not in Europe) get the iPhone 4 for dirt cheap or even free provided you sign a contract. Carriers in the US are very greedy.

Back to the article ... why would they keep the 3GS? It's going to be 2 generations behind...

Zimmer62943 · Jun 29, 2011

bushido said:
lol america

i can already get the iPhone 4 for free with a 2 year contract

Haha, same, America your living in the past

dethmaShine said:
Source? Link?

Source? Me and Australia
Link? optus.com.au telstra.com.au vodafone.com.au three.com.au and any other australian telecom company. we are always able to get the iphone free with 2 year contract even from day 1.

Ivan0310 · Jun 29, 2011

Just out of curiosity, I decided to browse the Vodafone Australia phones and plan. Man they are cheap. ::Jealous::

Ugg · Jun 29, 2011

Americans are getting ripped off so bad.

I can see keeping the 3GS for emerging markets, but I would prefer a stripped down version of current tech, rather than something that is 3 years old. If this report is true, it looks like I still won't be buying an iPhone and will have to make do with my Android.

MonkeySee.... · Jun 29, 2011

Really? Is anyone going to get a phone that is soon to be 3 generations old?

My 3GS is getting tired and i'm sure iOS 5 isn't going to help. I can't wait to palm it off on the sister-in-law.

JasperJanssen · Jun 29, 2011

No way in hell.

Apple doesn't *want* to keep supporting the 3GS with new versions of iOS. It may get iOS 5, but it's unlikely to get all the new iOS 5s, let alone iOS 6.

supmango · Jun 29, 2011

MonkeySee.... said:
Really? Is anyone going to get a phone that is soon to be 3 generations old?

My 3GS is getting tired and i'm sure iOS 5 isn't going to help. I can't wait to palm it off on the sister-in-law.

I guess your sister-in-law would...

longofest · Jun 29, 2011

MonkeySee.... said:
Really? Is anyone going to get a phone that is soon to be 3 generations old?

My 3GS is getting tired and i'm sure iOS 5 isn't going to help. I can't wait to palm it off on the sister-in-law.

There are a bunch of costs associated with having so many different product lines going at the same time. You'd either have to tool up another assembly line to do the model, or do a production run of your lowest expected volume model and then retool and switch models, which would leave inventory lying around, and we know how much Tim Cook likes inventory.

Inventory, Cook has said, is "fundamentally evil," and he has been known to observe that it declines in value by 1% to 2% a week in normal times, faster in tough times like the present.

I expect Apple to stick to their previous-model and latest-model strategy and not complicate things any more than needed.

mlmwalt · Jun 29, 2011

I can't see :apple:

doing it. They aren't going to want to support it once iOS5 gets too robust for it. Additionally, :apple:

doesn't gain anything by keeping the 3GS alive. It would be like Aston Martin selling 2009 cars and calling them entry level 2011's. Not gonna happen...

That said, I can't wait for the iPhone 5!!!

MonkeySee.... · Jun 29, 2011

supmango said:
I guess your sister-in-law would...

She's only 18 and uses "Pay as you go". I'm sure she will appreciate the free phone but there is no way she'd commit to a 2 year contract for old tech.

But hey, that's just my view.

acfusion29 · Jun 29, 2011

i really miss my 3GS

if that thing had a retina display and faster processor, i wouldn't have upgraded to the 4.

dont get me wrong.. the 4 is a great phone, but the 3GS feels way better in my hands.

bushido · Jun 29, 2011

dethmaShine said:
Source? Link?

since day one

nad8e · Jun 29, 2011

mlmwalt said:
Additionally, doesn't gain anything by keeping the 3GS alive. It would be like Aston Martin selling 2009 cars and calling them entry level 2011's. Not gonna happen...

They maintain and try to gain market share for their hardware and iOS.

Sign me up for a $0 entry level 2009 Aston Martin!

ArtOfWarfare · Jun 29, 2011

My guess would be if Apple did this, it would only be to clear out inventory of the 3GS around the launch of the iPhone 5. As others have stated, Apple wouldn't continue producing a product more than a single generation old.

slu · Jun 29, 2011

bushido said:
lol america

i can already get the iPhone 4 for free with a 2 year contract

Laugh all you want now. We will be the ones laughing as the new iPhone gets released in the US first, probably several months before your country. Or as EVERY device/service Apple makes get released in the US before it makes it to your country - if it ever even does.

Or you could not be all smug about it....

Also, I would buy one of these for my wife. She is still on a 3G and doesn't really mind it, but she is not eligible for an upgrade as I used her's when I lost my first iPhone 4. So if I could get a $349 or $399 no committment 3GS for her I would. The wireless syncing and OTA software updates are the features she really needs from iOS 5.

MonkeySee.... · Jun 29, 2011

slu said:
Laugh all you want now. We will be the ones laughing as the new iPhone gets released in the US first, probably several months before your country. Or as EVERY device/service Apple makes get released in the US before it makes it to your country - if it ever even does.

Or you could not be all smug about it....

Haven't the US only just iPhone, carrier free? Uk had that from day one. I appreciate you'd get the Phone maybe a week before us if at all but your carrier situation seems to be pretty poor.

Bit wierd that.

andyx3x · Jun 29, 2011

MonkeySee.... said:
Really? Is anyone going to get a phone that is soon to be 3 generations old?

Free is the key word. People see the word free and they go nuts. They don't think about anything else.

jonnysods · Jun 29, 2011

I reckon that they should cut the 3GS right out as they won't support it soon.

I feel sorry for anyone who picks up one of those. It will be like the 3G is now very soon.

soco · Jun 29, 2011

jonnysods said:
I reckon that they should cut the 3GS right out as they won't support it soon.

I feel sorry for anyone who picks up one of those. It will be like the 3G is now very soon.

Why would they not support it? They've been supporting 2 generations back so far. Haven't they? Because I think the 3G is still in use.

Also, why would you feel sorry? The 3GS is still a phenomenal smartphone. Especially for newcomers to the smartphone world. I plan on picking up a free 3GS for my father who is unfortunately struggling with a busted HTC Aria on AT&T. Poor fella...

snebes · Jun 29, 2011

nad8e said:
They maintain and try to gain market share for their hardware and iOS.

Sign me up for a $0 entry level 2009 Aston Martin!

Sure, but you have to pay the $1200 every few months for the oil change.

Apple to Cut iPhone 3GS Price to Free With Next Update?

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