The $49 contract price will be available for both new and upgrade-eligible AT&T customers. The handset with an 8GB capacity will be sold through the company's official online store, as well as in its more than 2,200 retail locations across the U.S.
"We want to deliver the best, most complete package for our customers from price, to speed, to worldwide access and more," said David Christopher, chief marketing officer of AT&T Mobility and Consumer Markets. "Combined with our new, lower monthly data plans beginning at just $15 a month, this new price brings even more value to one of the most popular devices in our leading lineup of smartphones. Were very excited for more people to experience iPhone on the nation's fastest mobile broadband network."
AT&T noted in its accompanying press release that the price of the iPhone 3GS sold in Apple's own channels is determined by Apple, suggesting that the $50 price cut for the handset is solely AT&T's doing. Apple's own official iPhone site still shows the 8GB iPhone 3GS for $99.
Starting with the launch of the iPhone 3GS in 2009, Apple began selling the previous year's model with a two-year AT&T contract in the U.S. for $99. While the initial $99 handset from Apple was the iPhone 3G, last year that was upgraded to the 8GB iPhone 3GS when the iPhone 4 launched.
AT&T's aggressive price strategy with the entry-level iPhone 3GS is viewed as a preemptive strike against competitor Verizon, which is expected to launch its own iPhone from Apple early this year. In covering AT&T's price cut on Thursday, Dow Jones Newswires noted: "The move comes as competitor Verizon Communications Inc. gears up to offer the popular smartphone."