Will Apple offer two handsets later this year, the iPhone 5 and an unknown option? So far, the answer to the question is yes, no, and both — and its only Wednesday.
Wednesday, RBC Capital Markets’ analyst Mike Abramsky told investors Apple is “expected” to make the three-year-old iPhone 3GS free with a two-year contract when the iPhone 5 launches later this year.
Earlier this week, another analyst said the Cupertino, Calif. firm would introduce an iPhone 4S, as well as the iPhone 5. That prediction was refuted by a Tuesday report that the tech giant would not introduce a second handset.
“While a $49 iPhone is already available (AT&T), psychologically a $0 iPhone provides a compelling offer,” Abramsky writes.
Data suggests 14 percent of people surveyed are “very/somewhat likely” to buy the free iPhone 3GS with a two-year contract – higher than the 13 percent interest for the iPad and the 9 percent interested in the first iPhone, according to the analyst.
A free iPhone 3GS could reach mid-market handset buyers, doubling Apple’s potential market to 150 million smartphones. Even a lower-priced $399 iPhone 3G that is unsubsidized would increase Apple’s share, Abramsky writes.
Abramsky also believes Apple will unveil a “baby” iPhone in 2012 that would make heavy use of iCloud services. Because the handset would not be released at the same time as the iPhone 5, the analyst doesn’t expect much cannibalization of the next-gen handset.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
42 responses to “The iPhone 3GS Will Be Apple’s $0 iPhone”
If this is true, and Apple launches a mid-range iPhone too the game will change dramatically! The Android community is constantly blasting iOS for its lack of choice in handsets. I would love to see an iPhone in the Nano form factor in the near future so we could make phone calls Dick Tracy style!
-Chris
http://friendsofmac.net
I think this would be really cool. At the same time, the 3GS is also only available in an 8GB form, which will “force” some people to the 16 GB iPhone 4… which will probably drop to $100/$150/$200.
Good stuff :D
– Bryant
http://www.gagagadget.com
The 8GB 3GS is already FREE on O2 in the UK on their £21.50 per month tariff.
I’m calling BS on this. I can’t see Apple keeping the 3gs after the 5 comes out. THe pattern has been to drop the previous gen to 8gb and I think that will stick. the 3gs will eol with the 5 if not actually sell out just before.
As for the whole ‘heavily use’. all the phones will do that.
The Android community might blast iOS but the iphones still sell like mad. And what they are talking about is that you can only get an Apple iphone, not the sizes. And that will never ever change.
I don’t think they’ll release a ‘4S’. Why release a new mid-range model when you’ve got a perfectly good one (the iPhone 4) already available? My guess is that they’ll do what they usually do; new iPhone 5, old iPhone 4, but perhaps they might offer it with both 8GB and 16GB. The iPhone 5 will then take 32GB and 64GB. I doubt the 3GS will stay.
This may be a stupid question, but will iOS 5 work on the 3GS?
More importantly, will iOS 6 work on it? (iPhone 3GS)
I can’t see apple keeping the 3GS out there. It is two years old and just plain not fresh. They may give it a different smaller screen different case and mix up the internals a bit and sell it as a nano. I believe that would position them the best. They would have a “new” phone that was pretty cheap and could still beat 75% of all android non-feature, crap phones out there
A fully subsidized iPhone would be nice. The problem, though, is that Apple is very protective of its prices because it doesn’t want erosion of its brand and perceived value of the devices.
i agree with most of you,, i believe that apple will keep the 3gs as its low end model. I also think that apple will use the 3gs in its new strategy to go into the prepaid market. soon apple will have 3 handsets on the market, with a 4th on the way in 2012.
it is my belief that 3gs will be free with contract, or buy unlocked for 299. on prepaid. this will allow apple to gain market share.
if any of you can recall, 4th quarter earnings call, COOK COO said that they have some interesting things in regard to the prepaid market. and i believe the 3gs will be that phone.
i also think that the 4s will gain tmobile and sprint…..qualcoms dual band chip is already in verizon model phones,, this will allow apple to produce one handset instead of different models for each carrier. so this kind of ties into my feeling of the 3gs prepaid, if it has a dual band chip in it,, why wouldnt it make a great unlocked/prepaid option?
i have ios 5 developer copy on my 3gs, runs like a dream, acually phone runs a bit faster
i think the NANO iphone will come next year, a slightly smaller version of a 3gs model, i would have to say
Right now, Telcel in Mexico is giving out 3GS for free if you sign on for a 40-ish bucks plan…so, it already is the $0 phone, at least for us.
1) It already is the zero dollar phone everywhere but the US
2) It will be discontinued when the next iPhone comes out.
so 3) ….
who cares?
No smaller screen, no way. They will not ruin one of their best accomplished strategies, and one that is proving to be awfully successful. They will not balkanize iOS à la Android, or à la RIM, that would be a huge leap back for developers. They could do a “nano”, but not by sacrificing screen real estate. Edges may be. And I’m sure that with today’s technology (when compared to 2 years ago) they could deliver a 3GS hardware with the same screen size but in a smaller factor.
Before I used it I thought Facetime was probably cool.. but, so what? Lots of other chat stuff out there. A few days later, it’s a different story. Facetime is AWESOME. Compared to Skype it’s consistently rock solid on lip sync and video quality, even on calls round the globe, and the one button dial is just so slick. Therefore… and assuming my experience is typical, why wouldn’t Apple want its cheapos to Facetime too? 3GS doesn’t have a forward facing camera of course.
Who cares what the Android community says? Talk to Android USERS and ask them if they would prefer a real smartphone. Bet you most of them lust for an iPhone. Betcha.
In Canada you can get the iPhone 4 on a three-year contract for $124.99 …just sayin’
…I think they’re going to release the iPhone 4S, drop the iPhone 4 $100, discontinue the 3GS, get everyone to continue shitting their pants about iOS 5 and move on.
You can already get them free in the UK on quite basic contracts. £21.50 on the network I’m on, though you have to top up on the data. That’s only £5 more than my contract, which is a SIM only.
So in essence, an £120 iPhone