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AT&T Seeing "Tremendous Demand" for Free iPhone 3GS

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macrumors bot
Original poster
Apr 12, 2001
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In a conference call with analysts this afternoon, Ralph de la Vega, President and CEO of AT&T Mobility discussed the impact of the recent price drop on older-generation iPhones, particularly the iPhone 3GS. That phone is the first iPhone be offered free with 2-year contract in the U.S.
We have another device that I think is going to dramatically change those people that are on smartphones and quick messaging devices, the [iPhone] 3GS, which is free with a 2-year contract. We've seen a tremendous, tremendous demand for that device even though it's a generation old. And actually, we're getting more new subscribers coming on the 3GS on the average than other devices. So we also have an inventory sold out on that device.
De la Vega also noted that AT&T, like Apple, had slightly slower numbers this quarter as a result of the next-generation iPhone launching in the fourth calendar quarter versus the third. He expects AT&T's numbers to surge in the holiday quarter with the launch of the iPhone 4S, saying the company was "very, very optimistic on what the fourth quarter is going to look like in terms of smartphone growth."

Article Link: AT&T Seeing "Tremendous Demand" for Free iPhone 3GS
 

outphase

macrumors 65816
Jun 13, 2009
1,291
32
Parts Unknown
wow.. don't people realize how old this phone is? Oh well some may enjoy it and if they can great.

Some people don't care. They are enamored by the "free"-ness of it. I'm actually curious as to the number of Android devices which were just free or almost free. I have heard of some people getting them because they're "like an iPhone but cheaper."
 
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chrmjenkins

macrumors 603
Oct 29, 2007
5,322
154
CA
And thus, the power of the $0 price point is demonstrated. This same phone was $49 before the 4S launch, which is less than 10% of the overall cost you pay for the entire contract.
 
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Shanpdx

macrumors 68020
Sep 24, 2008
2,473
299
Blazer town!
WOW when $375 is FREE?

WOW when $375 is FREE?

it is FREE with two year contract...

minimum voice and data plan = $40 + $15 = $55 x 24 = $1320
 
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iVoid

macrumors 65816
Jan 9, 2007
1,134
160
Which seems silly to me.

Free + $1680 over the two year contract for the cheapest voice+data plans.

Chip in an extra $100 or $200 to get a 4 or 4S.

But then most people never calculate how much that 2 year contract costs them for their 'free' phone. :)
 
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ChrisA

macrumors G4
Jan 5, 2006
11,777
563
Redondo Beach, California
Gosh people are stupid. The phone is "free" only after you sign a $2,000 contract.

I wish AT&T would give me the names of people who got those free phones. I'm sure I could sell them a ton of "free" stuff. Anyone here want a "free" car? Just sign this contract, give me no money and you can drive it away...
 
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aristotle

macrumors 68000
Mar 13, 2007
1,768
5
Canada
Which seems silly to me.

Free + $1680 over the two contract for the cheapest voice+data plans.

Chip in an extra $100 or $200 to get a 4 or 4S.

But then most people never calculate how much that 2 year contract costs them for their 'free' phone. :)
Uh, yeah. The service costs the same whether you get a subsidized phone or not so free is free.

This is really going to cause nightmares for Google and their partners as not only is this a "Free" phone but it also runs the latest iOS 5 unlike a lot of android phones out there which will never receive an update from the handset maker.

@ChrisA: You might want to not call people stupid if you don't realize that you are going to pay the same for the service whether you are on a contract or not and whether you receive a subsidized phone or not. Hardware upgrades are a loss leader for carriers to get you to sign up for a contract. Contracts give some kind of guarantee that you will continue using their service months down the road.

You can sometimes negotiate what is called a "retention" plan after your original contract is up but that usually does not give you access to a subsidized phone but just gives you a lower rate.
 
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CIA

macrumors 6502a
Jun 17, 2003
584
262
God AT&T must love that the 3GS is still around. They pay about $350-$400 for it, get a low data customer (if you buy the 3GS, honestly, you probably aren't using a lot of data), and you get to rape them for $100 every month for 2 years. They make a profit off you in about 5 months. Then 19 months of gravy. Bravo!
 
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jlgolson

Contributing Editor
Jun 2, 2011
379
4
Durango, CO
When I worked at an Apple Retail Store, there were lots of people who were willing to roll a data plan for their kids into their monthly family plan bill, but were unwilling to shell out $199 to buy them an iPhone.

Some people simply don't care about the latest gizmos and care more about how much money they actually have to shell out right now.
 
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drumrobot

macrumors member
Oct 6, 2009
37
0
We've seen a tremendous, tremendous demand for that device even though it's a generation old.

Isn't it two generations old?
iPhone 4S=last/current generation
iPhone 4=1 generation old
iPhone 3GS=2 generations old
 
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lilo777

macrumors 603
Nov 25, 2009
5,144
0
"We've seen a tremendous, tremendous demand for that device even though it's a generation old."

It would seem he is implying that iPhone 4 and iPhone 4S are the same generation phones. I do not necessarily disagree...
 
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nsfw

macrumors regular
Aug 21, 2009
130
74
Which seems silly to me.

Free + $1680 over the two year contract for the cheapest voice+data plans.

Chip in an extra $100 or $200 to get a 4 or 4S.

But then most people never calculate how much that 2 year contract costs them for their 'free' phone. :)

And you wonder why idiotic americans signed sub-prime mortgage contracts and went broke. This "free" 3GS deal is such a bad deal for the consumer and potentially gives Apple a bad name. Yer going to end up with a couple million people who say, "ya i tried the iphone (the 3gs in 2011) and it was kinda slow and the screen and camera wasn't very good" The only winner is ATT. Maybe a few devs who sell apps to these buyers.
 
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dashiel

macrumors 6502a
Nov 12, 2003
876
0
Which seems silly to me.

Free + $1680 over the two year contract for the cheapest voice+data plans.

Chip in an extra $100 or $200 to get a 4 or 4S.

But then most people never calculate how much that 2 year contract costs them for their 'free' phone. :)

My thoughts exactly, though it must really burn HTC/Samsung/Google, et. al., they pour hundreds of thousands of dollars in to specs, change the design and incur costs for R&D and manufacturing set-up and here’s Apple taking an a 3 year old design and it’s still selling like crazy.

I can’t imagine anyone in manufacturing not being insanely envious of Apple’s supply chain management and forecasting ability.
 
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manu chao

macrumors 604
Jul 30, 2003
6,939
2,830
And thus, the power of the $0 price point is demonstrated. This same phone was $49 before the 4S launch, which is less than 10% of the overall cost you pay for the entire contract.
I would say less than 3% ($49/(24*$80) = 0.0255). But then this 'free' iPhone 3GS is largely a US-only phenomenon. Only in the US are the provider subsidies the same among all providers and for all plans. And I thought identical prices everywhere was only possible in a heavily regulated economy. But I guess in a completely unregulated one, the companies create the 'regulation' themselves (called price fixing).
 
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RafaelT

macrumors 65816
Jun 9, 2010
1,166
5
NM
I doubt we will see iOS 6 on the 3GS... also the people getting the 3GS now are not people who care about the latest and greatest tech... the same people who wont miss iOS 6.

I can honestly see this putting a dent into Android growth.
 
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Eidorian

macrumors Penryn
Mar 23, 2005
29,096
302
Indianapolis
it is FREE with two year contract...

minimum voice and data plan = $40 + $15 = $55 x 24 = $1320
I would much rather buy the phone outright. T-Mobile has a nice no contract $30/month plan for new customers. I might get that eventually.

I was quite impressed when my phone (Samsung Exhibit 4G) handled AIM, a NPR radio stream, and a YouTube link side by side without a hiccup. I am still getting used to this. I chose this phone for the WVGA display and front facing camera.
 
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