'Free' iPhone 3GS, $99 iPhone 4 likely, analyst suggests
updated 11:55 am EDT, Wed June 29, 2011
Would see three different iPhones on market
The iPhone 3GS will continue to be available this September, but will be free on a carrier contract, argues RBC Capital analyst Mike Abramsky. "While a $49 iPhone is already available (AT&T), psychologically a $0 iPhone provides a compelling offer," he writes. The same device might be $399 unsubsidized. The iPhone 4 is predicted to drop to a $99 standard price, which would follow Apple's normal policy regarding last-generation iPhones.
Abramsky bases the notion of a free 3GS on the ChangeWave survey from June, during which 1,500 people were asked whether they would get a 3GS for themselves or someone else if it was free with a two-year AT&T contract. 14 percent said they would be somewhat or very likely to take up the offer, a higher level of interest than for buying the original iPhone (9 percent) or the iPad 1 (13 percent).
A free iPhone 3GS would add $7 billion in revenue and $1.82 in EPS, Abramsky estimates, assuming a drop in other iPhone sales by 10 percent. The proposed scenario would however see the iPhone 5, 4 and 3GS all selling at the same time, and Apple has never sold more than two iPhone models at once. India is reportedly getting an unlocked 3GS for 19,990 rupees, or $444 US.
Fresh-Faced Recruit
Joined: May 2002
get rid of 3GS?
My strategy would be to get the 'better' iPhones into the pockets of consumers and would rather see the 3GS discontinued with the iPhoen4 having a $49 tag. Things still seem a little overpriced given that I purchased the original iPhone outright for $499. Even the 3GS originally had performance issues on 4.x if I remember correctly.
That way Apple and Developers and sooner target the lowest common denominator. Like my original iPhone, it's now 4 years old and am just starting to think about upgrading. When iOS6 comes out, the 3GS crowd will wonder why they can't upgrade on a 1-2 year old phone?