Never miss an update Follow AppleInsider
Wednesday, June 29, 2011, 08:50 am
Apple will offer free iPhone 3GS with 2-year mobile contract - report
Apple is prepared to offer the iPhone 3GS, first released in 2009, as a free subsidized phone with a two-year service contract, according to a new report.Analyst Mike Abramsky with RBC Capital Markets said on Wednesday that Apple is "expected" to offer the iPhone 3GS for free when the iPhone 5 launches later this year. He said this approach would help Apple with mid-market buyers, and would also help the iPhone counter the growth of Google's Android platform.
"While a $49 iPhone is already available (AT&T), psychologically a $0 iPhone provides a compelling offer," Abramsky wrote in a note to investors. "Proprietary survey data... suggests 14% are very/somewhat likely to buy the iPhone 3GS for free with 2-year contract, exceeding buying interest for the iPad (13%) and original iPhone (9%)."
Abramsky sees the offering of a free iPhone 3GS as a way for Apple to double its potential market opportunity to more than 150 million smartphones. A lower-priced iPhone 3GS, offered $399 unsubsidized, would also increase iPhone share globally, he said.
The analyst also expects Apple to release what he called a "baby" iPhone in 2012. That later release would avoid iPhone 5 cannibalization, and would allow such a device to better leverage iCloud services.
For Apple to still offer the iPhone 3GS after the launch of a fifth-generation iPhone would be a change, as in years past Apple has discontinued its two-year-old smartphone model. For example, last year the iPhone 4 launched, the iPhone 3GS was dropped to $99, and the iPhone 3G was discontinued.
In January, the price of the iPhone 3GS was reduced even further, to $49 in the U.S. The device carries an 8GB capacity, half that of the entry-level 16GB iPhone 4, which sells for $199 with a new two-year contract.
In May it was revealed that the iPhone 3GS, along with the first-generation iPad, often outsells many newer Android-powered devices. It was noted that older products can offer Apple an aggressive tiered pricing strategy that can help ward off competition.
Though the iPhone 3GS was first released in 2009, it will be compatible with Apple's forthcoming mobile operating system update, iOS 5. That update is scheduled to arrive this fall, likely alongside the release of a fifth-generation iPhone.
On Topic: iPhone
- AT&T to bring FaceTime over cellular to all customers by end of year
- Apple debuts new iPhone discounts, subsidies to gain ground in India
- Looking to pull even with Apple, Samsung to pay developers for Galaxy-specific apps
- 10M Samsung flagship phones in 28 days a 'record,' 5M iPhone 5 in 3 days 'disappointing'
- Briefly: Virgin Mobile offers 15% discount on prepaid iPhone 4/4S
Previous Comments View All
Why in the world would Apple sell a phone that is almost immediately going to get outdated. At the least they have to put an A4 if not A5 in there, so when they come out with future software updates, their customers don't feel like they've been cheated, like Samsung and the rest.
Quote:
Originally Posted by AppleInsider 
"Proprietary survey data... suggests 14$ are very/somewhat likely
"Proprietary survey data... suggests 14$ are very/somewhat likely
I'm assuming that should read "14%".
#corrections
--Stephen
Quote:
Originally Posted by bartfat
Why in the world would Apple sell a phone that is almost immediately going to get outdated. At the least they have to put an A4 if not A5 in there, so when they come out with future software updates, their customers don't feel like they've been cheated, like Samsung and the rest.
Why in the world would Apple sell a phone that is almost immediately going to get outdated. At the least they have to put an A4 if not A5 in there, so when they come out with future software updates, their customers don't feel like they've been cheated, like Samsung and the rest.
If true, this shows that Apple is desperately holding onto hopes that they can still win the market share fight, or trying not to fall too far behind.
Quote:
Originally Posted by bartfat
Why in the world would Apple sell a phone that is almost immediately going to get outdated. At the least they have to put an A4 if not A5 in there, so when they come out with future software updates, their customers don't feel like they've been cheated, like Samsung and the rest.
Why in the world would Apple sell a phone that is almost immediately going to get outdated. At the least they have to put an A4 if not A5 in there, so when they come out with future software updates, their customers don't feel like they've been cheated, like Samsung and the rest.
Supply. Apple's iPhone business is far more supply constrained than people realize. Horace Dediu of Asymco made this point a while back, no other phone maker produces one model a year and makes twice as many of that model as they did of the previous model. Every other phone maker has a big portfolio of models that allows them to handle supply more smoothly, and besides they're not growing their overall business at anything like Apple's rate.
Apple already has functioning supply chains and assembly plants for the 3GS, so why shut those lines down for as long as the 3GS is capable of running the latest OS and is selling well? At some point they may indeed decide to upgrade the internals to an A5 - but it will depend on how that would affect the tooling on the supply line.
As for immediately outdated - the 3GS runs iOS 5, and supposedly runs it pretty well. So the 3GS is good for at least a year, quite possibly more - which is a longer support life than the average Android phone can expect at launch. Many people don't need uber tech specs, especially people converting over from dumb-phones.
I wonder if this analyst has information from suppliers that leads him to believe that the 3GS supply is not being run down ahead of the iPhone5/4S launch.
I would rather pay $99 for an iPhone 4 when 5 comes out than get a free 3GS. The very reason millions get the latest says why we say goodbye to the previous shiny object. Who knows after they tell me all about the iPhone 5 I may change my mind and only want that!
Sigh, this is praying on idiots. The cost of the phone at $49 is only 2.7% of the minimum total cost for a cellphone plan on AT&T (450 minutes, 2GB data = ~$75/month w/ taxes * 24 = $1800).
If this makes a major dent, then I think people need to be sent back to a 3rd grade math class.
EDIT: forgot about the $15 250MB plan. (450 minutes, 250MB data = ~$60/month w/taxes * 24 months = $1440), $49/$1440 = 3.4% of the total minimum cost of a cellphone plan. Still doesn't change my point.
Quote:
Originally Posted by stelligent
If true, this shows that Apple is desperately holding onto hopes that they can still win the market share fight, or trying not to fall too far behind.
If true, this shows that Apple is desperately holding onto hopes that they can still win the market share fight, or trying not to fall too far behind.
Gosh, yes, the desperation of continuing to sell - at a cheaper price - the second most popular device in the US ( and possibly the world).
The sheer desperation.
Fact is the CPU in the 3GS delivers, in the real world, about the same speed as the iPhone 4. Less pixels to worry about for sure, but it feels just as zippy. I say rename it the iPhone Classic - have two or three models. Update it every year with last years chip, and never have a retina display so as to not canibilise your top end models. Then drop the lower end on that baby to $250, but have more options at the higher end - that is: the classic sells from $250-$350, and the iPhone 4/5 form $450-$700.
Quote:
Originally Posted by dagamer34
Sigh, this is praying on idiots. The cost of the phone at $49 is only 2.7% of the minimum total cost for a cellphone plan on AT&T (450 minutes, 2GB data = ~$75/month w/ taxes * 24 = $1800).
If this makes a major dent, then I think people need to be sent back to a 3rd grade math class.
Sigh, this is praying on idiots. The cost of the phone at $49 is only 2.7% of the minimum total cost for a cellphone plan on AT&T (450 minutes, 2GB data = ~$75/month w/ taxes * 24 = $1800).
If this makes a major dent, then I think people need to be sent back to a 3rd grade math class.
It will probably be free on all plans. Only in America - apparently - is there one plan for all users of a phone. If the carriers can get it fro $200 less they can take that off their plans.
Latest Apple Headlines
-
Vudu Player for iOS update brings movie and TV show download support
~3 hours ago -
Google's Chrome team developing app launcher for Mac
~5 hours ago -
Apple publishes execs' opening statements from US Senate testimony
~7 hours ago -
Apple CEO Tim Cook says America's IP environment needs more work
~9 hours ago -
Microsoft unveils 'Xbox One,' a voice-controlled all-in-one entertainment hub
~10 hours ago - more...
| Model | White | Black | |
|---|---|---|---|
| iPad mini (WiFi only) | |||
| 16GB WiFi |  |
$329.99 | $329.99 |
| 32GB WiFi | |
$429.99 | $429.99 |
| 64GB WiFi | |
$529.99 | $529.99 |
| iPad mini (WiFi + 4G) | |||
 |
 |
 |
|
| 16GB 4G White | $459.99 | $459.99 | $459.99 |
| 32GB 4G White | $559.99 | $559.99 | $559.99 |
| 64GB 4G White | $659.99 | $659.99 | $659.99 |
| 16GB 4G Black | $459.99 | $459.99 | $459.99 |
| 32GB 4G Black | $559.99 | $559.99 | $559.99 |
| 64GB 4G Black | $659.99 | $659.99 | $659.99 |
Lowest Prices Anywhere!
| Model | Price | You Save |
|---|---|---|
| Core i5 MacBook Pros w/ Retina | ||
| 13" 2.5GHz/8GB/128GB | $1,406.48 | $292.52 |
| 13" 2.5GHz/8GB/256GB | $1,479.99 | $519.01 |
| 13" 2.5GHz/8GB/512GB | $1,699.99 | $799.01 |
| Core i7 MacBook Pros w/ Retina | ||
| 13" 2.9GHz/8GB/256GB | $1,599.99 | $599.01 |
| 13" 2.9GHz/8GB/512GB | $1,799.99 | $899.01 |
| 15" 2.3GHz/8GB/256GB | $1,899.99 | $299.01 |
| 15" 2.6GHz/8GB/512GB | $2,299.99 | $568.01 |
| 15" 2.7GHz/16GB/768GB | $2,699.99 | $499.01 |
It'd be great if we could stop this analyst from having his own babies. This level of nonsense must be genetic, and there's no reason to sully someone else's life with it.