AT&T announced Thursday it will begin selling 8GB iPhone 3GS phones to new and upgrade-eligible customers for $49 starting Friday, January 7. The third generation Apple smartphones continue to be priced at $99 when purchased directly from Apple, while AT&T’s discounted offer will be available online and at its more than 2000 US retail stores.
The price drop has predictably led to much speculation among mobile phone watchers as to both AT&T’s motivation (given there’s no indication Apple has cut its prices to the carrier) and Apple’s plans to announce new phones and possibly new carrier agreements in the coming year.
An obvious key to the unknowns is that new and upgrade-eligible AT&T customers will be required to sign on for new two year contracts with the carrier in order to get the 3GS discounted price. AT&T has been widely derided among iPhone users in the past couple of years for its spotty service, which has in turn led to rampant speculation that Apple could make its phones available to other mobile carriers as early as the 1st quarter of 2011.
AT&T’s pricing move is a strong signal that iPhones are coming soon to another carrier — Verizon appears the odds-on favorite among many with an opinion on the matter — and it’s clearly an aggressive attempt to head off a flood of defectors from its network should such an opening occur.
Last week David Holub, a San Francisco Bay Area data center developer who has been a long-time AT&T customer, upgraded to iPhone 4 and reluctantly signed on for another two-year hitch with the beleaguered carrier. “I was trying to stiff-arm the sales guy, saying I really didn’t want to sign a new contract,” Holub said. “But he pushed back saying their network is going to bounce back when everybody leaves and goes over to Verizon.”
Consensus among other long-time Apple and AT&T watchers seems to favor something sooner rather than later. “I didn’t think it’d be out by January,” one industry veteran said, “but with the recently rumored Black-Out and AT&T slashing prices, I think we’ll definitely be seeing a CDMA-iPhone 4 in a couple weeks on Verizon.”
With Apple also expected to announce its traditional start-of-the-year event within the next few weeks, others wonder whether we might see both a new mobile carrier and a new iPhone 5, though some believe the odds favor a new carrier for a CDMA or LTE iPhone 4 now and a new iPhone 5 sometime in the 2nd half of this year.
In any event, AT&T’s announcement has definitely stirred the pot. The perfectly serviceable iPhone 3GS at $49 will arguably be the very best smartphone deal on the market, for a while anyway.
