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Apple seen selling iPhone 3GS free with subsidy, $399 without contract

post #1 of 79
Thread Starter 
Though the iPhone 3GS was first released in 2009, one analyst has said Apple will continue to sell its third-generation handset after the "iPhone 5" is announced, offering it for free with a service contract or for $399 unsubsidized.

Ahead of Tuesday's iPhone event, analyst Mike Abramsky with RBC Capital Markets said he expects Apple to introduce a refreshed iPhone this week, likely to be branded either "iPhone 5" or "iPhone 4S." He doesn't expect Apple to introduce a second, cheaper iPhone model, but instead reduce the prices of its existing lineup.

To that end, he sees the iPhone 4 dropping to $99 subsidized, and $499 without a service contract. But he also believes Apple will retain the iPhone 3GS in its lineup, offering it for free with a two-year carrier agreement, or $399 contract-free.

That would be a change from years past, as Apple has traditionally discontinued its two-year-old iPhone model. With the release of the iPhone 4 in 2010, the iPhone 3GS was dropped to $99 with a contract, and in January the price was further reduced to $49.

Industry-watchers have been forecasting for Apple to introduce a new entry-level iPhone for years, allowing the company address a huge global prepaid wireless market, particularly in China. That led to speculation that Apple would release two iPhone models this year -- one low-end offering, and a full-fledged fifth-generation handset.

But even prior to its note issued to investors on Monday, Abramsky has expressed skepticism about a new, low-cost iPhone from Apple. Back in August, the RBC analyst said the primary requirement for Apple to launch a low-end iPhone would be to provide an "innovative, category-killer experience."

The same analyst also said in June that Apple is "expected" to offer the iPhone 3GS for free once the iPhone 5 launches. He sees the approach helping Apple with mid-market buyers, and would counter the growth of Google's Android platform.



While the continued availability of the iPhone 3GS would be a surprise, the real focus of this week's event, scheduled to begin at 10 a.m. Pacific, 1 p.m. Eastern on Tuesday, is the new fifth-generation iPhone. Aligning with most rumors, Abramsky believes the new iPhone will feature the A5 processor, an 8-megapixel camera, support for high-speed HSPA+ networks, and a new high-end capacity of 64GB.

Abramsky said Apple may choose to brand HSPA+ as "4G," as U.S. carriers T-Mobile and AT&T have opted to do, even though it is not "true" 4G long-term evolution. He also believes the new iPhone will offer voice recognition technology stemming from the company's acquisition of Siri.
post #2 of 79
If people loved the 3GS wouldn't it still be a great phone? Is it so much slower that by comparison people wouldn't want it? What are the main differences between the 3GS and what will be the iP5? Is there software that works on the iP5 that won't work on the 3GS other than Facetime?
post #3 of 79
This rumour makes sense - except for the price. Still too pricey for the PAYG market, I would've thought. Possibly a $299 version. In any case keeping the 3GS will make up, a bit, for the loss of the iPhone 5 in terms of sales.
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post #4 of 79
Quote:
Originally Posted by Smallwheels View Post

If people loved the 3GS wouldn't it still be a great phone?

It is.

Quote:
Is it so much slower that by comparison people wouldn't want it?

No.

Quote:
What are the main differences between the 3GS and what will be the iP5?

How could we know that?

Quote:
Is there software that works on the iP5 that won't work on the 3GS other than Facetime?

Uh, of course

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post #5 of 79
While there was a huge demand stated for iPhone 5, I'm not sure if that demand will stay true if they only release an iPhone 4S.

With an iPhone 4S ($99 subsidized 16G) and an iPhone 5, ($199, $299 subsidized 32G/64G) I was thinking they might keep the iPhone 4 at a Free subsidized choice.

But, alas, the rumors are seemingly squashing that pipe dream. Their media event will have to be pretty phenomenal to make me want to upgrade my iPhone 4. I currently could see this device lasting me until the next iPhone event, even if that was in February 2013.
post #6 of 79
I highly doubt Apple will still sell the 3GS. It's really starting to show it's age, and Apple is too much of a perfectionist to continue selling something that makes them, frankly, look bad. There's just no point.
post #7 of 79
Using Safari on my iPhone 3GS under iOS 4 is a painful experience. It frequently crashes or displays most of a webpage in the gray checkerboard look for a while until it finishes loading. Maybe iOS 5 has more optimizations for the 3GS, but personally, I would opt to kill the line and let the 8 GB iPhone 4 become the new low-end model.

The free Android phones are generally on par with the iPhone 4. Apple ought to kill the line than to compete with an aging phone that performs poorly compared to its direct competition.
post #8 of 79
I don't see it. With iOS 5, the 3GS is already going to be behind in features (it already lacks FaceTime) and, if the 3GS and, frankly, the 3GS just doesn't have the horsepower to keep up with the demands new apps will place on the hardware. Apple won't like that, and customers won't like that they can get an iPhone but that it won't be able to run all apps well, or be upgraded to iOS 6 next year.

Plus, that keeps Apple building 3 different iPhone models, which starts to put pressure on distribution, shipping, and stock.

I would more expect the iPhone 4 to be $49 or free, with an iPhone 4S being $99, and the iPhone 5 being $199 and $299.

What people forget, at least in the U.S., is that many of the phones which are "free" are actually only free with a mail-in rebate. The customer has to pay the $50-$100 for the phone up front, and then get the rebate later. Not with the iPhone 3GS *it's just a straight $49.
post #9 of 79
the 3GS is noticeably outdated. It has lived it's life and personally I think it should die.

A lower end iPhone 4 based model would be awesome though.
post #10 of 79
Quote:
Originally Posted by bizlaw View Post

Plus, that keeps Apple building 3 different iPhone models...

...I would more expect the iPhone 4 to be $49 or free, with an iPhone 4S being $99, and the iPhone 5 being $199 and $299.

Are you listening to yourself?!

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post #11 of 79
Quote:
Originally Posted by AppleInsider View Post

The same analyst also said in June that Apple is "expected" to offer the iPhone 3GS for free once the iPhone 5 launches. He sees the approach helping Apple with mid-market buyers, and would counter the growth of Google's Android platform.

The 3GS is still a surprisingly snappy device, even on iOS5 but I'll be shocked if Apple keeps it around for another year. Granted, I haven't looked at the build cost estimates or anything, but remember, it uses "off the shelf" chips rather than Apple's customized A4 / A5 designs. I strongly suspect that it costs more for Apple to produce the boards for a 3GS than for an iPhone 4. While the cheaper plastic back and low-res, non-IPS LCD likely make up for some of this, I just don't see it making much business sense to continue making a (soon to be) three year old design based on a higher number of someone else's parts. If Apple wants to go after the low end market, I think they'll do it with a modified iPhone 4 design or else design a new phone altogether.
post #12 of 79
It's already free here in the UK on a 20GBP/month contract (roughly 30USD, including tax).
post #13 of 79
My 3GS doesn't not have enough horsepower to keep up with the current versions of iOS. (Teh Snappies, my arse!)

I would think that Apple, knowing full well that's the case, has to be EOL'ing the 3GS when the new iPhone (iPhone 4S, iPhone 5, whatever) is released tomorrow.

I'd expect the iPhone 4 is what would be available for free with subsidy or $400 without a contract.

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post #14 of 79
Quote:
Originally Posted by asdasd View Post

This rumour makes sense - except for the price. Still too pricey for the PAYG market, I would've thought. Possibly a $299 version. In any case keeping the 3GS will make up, a bit, for the loss of the iPhone 5 in terms of sales.

Check it out:

$49.00=iPhone4 with 2 yrs contract
$399.00=iPhone4 for purchase-Prepaid services

$99.00=iPhone4S-16GB-2yrs contract
$199.00=iPhone4S-32GB-2yrs contract
$299.00=iPhone4S-64GB-2yrs contract

$199.00=iPhone5-16GB-2yrs contract
$299.00=iPhone5-32GB-2yrs contract

Just wait and see!!

This was posted at 8.00am today in few forums!!

May be you can add 3GS free with 2 yr contract !!! or $299.00 pre-paid !!!
post #15 of 79
Quote:
Originally Posted by eAi View Post

It's already free here in the UK on a 20GBP/month contract (roughly 30USD, including tax).

Yep, in Australia the iPhone 4 is free on a US$48 data/calls/sms 24 month contract.

The iPhone 5 will likely be free as well on plans US$48 and above.

The US is getting seriously ripped off only having the iPhone on two carriers.
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post #16 of 79
Quote:
Originally Posted by John.B View Post

My 3GS doesn't not have enough horsepower to keep up with the current versions of iOS.

they will cut it but not due to horsepower.

it's all about the cameras and FaceTime. Apple wants to get folks talking in ways that remove them from the carrier side of the game. So free FaceTime on wifi rather than making a phone call. Free iMessages instead of SMS. and so on

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post #17 of 79
Quote:
Originally Posted by TimUSCA View Post

I highly doubt Apple will still sell the 3GS. It's really starting to show it's age, and Apple is too much of a perfectionist to continue selling something that makes them, frankly, look bad. There's just no point.

I use my 3GS every day. While I'm anxiously awaiting the new upgrade, I don't have any complaints with the 3GS per se; in fact, my daughter is anxiously awaiting it as a hand-me-down.

I really don't see any reason to force the retirement of the 3GS.
post #18 of 79
This is going to be a really interesting day Tuesday for me.
We traditionally roll phones down, me to wife, to daughter. Important this year because daughter's phone died a couple of months ago.
So I'll have to decide if I'm going to get the new top end phone, give iPhone 4 to wife, and her 3GS to daughter, of it I stick to my iPhone 4 (which I really really like) and just get a 'free' 8GB 3GS for daughter.

If the new phone's only advantages are processor, RAM and camera I'm going to have to think long and hard about this. I have no complaints about any of those 3 with my IPhone 4.
Multi-carrier and 4G are total non issues for me.

We'll see Tuesday.
post #19 of 79
Quote:
Originally Posted by tlevier View Post

While there was a huge demand stated for iPhone 5, I'm not sure if that demand will stay true if they only release an iPhone 4S.

With an iPhone 4S ($99 subsidized 16G) and an iPhone 5, ($199, $299 subsidized 32G/64G) I was thinking they might keep the iPhone 4 at a Free subsidized choice.

But, alas, the rumors are seemingly squashing that pipe dream. Their media event will have to be pretty phenomenal to make me want to upgrade my iPhone 4. I currently could see this device lasting me until the next iPhone event, even if that was in February 2013.

Apple does't want you to upgrade your iPhone4 to the iPhone5.

They want the iPhone 3GS folks to update to the iPhone5. Unlike the Android world, they are expecting their phones to truly be 2 year phones (and the 3GS has become a 3 year one, with it supporting iOS5).

Come to think about it, this is not surprising at all, because otherwise Apple would not have gone through the trouble to have the 3GS support iOS5.
post #20 of 79
Hmm... I'd think Apple would want to phase out the 480x360 displays this year in favor of the 960x720 panels, even if the low end gets a TN panel instead of IPS.
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post #21 of 79
Quote:
Originally Posted by Smallwheels View Post

If people loved the 3GS wouldn't it still be a great phone? Is it so much slower that by comparison people wouldn't want it? What are the main differences between the 3GS and what will be the iP5? Is there software that works on the iP5 that won't work on the 3GS other than Facetime?

Personally I'm craving an iPhone 5 trapped within a 3GS' body.

Antennagate notwithstanding, I've always found the 3GS a more durable phone.
post #22 of 79
Quote:
Originally Posted by cajun View Post

I use my 3GS every day. While I'm anxiously awaiting the new upgrade, I don't have any complaints with the 3GS per se; in fact, my daughter is anxiously awaiting it as a hand-me-down.

I really don't see any reason to force the retirement of the 3GS.

The 3GS is a great phone - never had any reception problems with it like my iPhone 4 nor delicacy issues.
All it needs is a cameraflash added- forget FaceTime, a gimmick at most.
post #23 of 79
Quote:
Originally Posted by solipsism View Post

Hmm... I'd think Apple would want to phase out the 480x360 displays this year in favor of the 960x720 panels, even if the low end gets a TN panel instead of IPS.

yea that makes sense...but then again any app designed for 480x360 scales perfectly to 960x720...

the only reason to get rid of the 3GS is because it is seriously outdated.
post #24 of 79
Quote:
Originally Posted by AbsoluteDesignz View Post

yea that makes sense...but then again any app designed for 480x360 scales perfectly to 960x720...

the only reason to get rid of the 3GS is because it is seriously outdated.

The iPhone 4 resolution is actually 640×960 and the prior models were 320x480 (still a 4x increase in pixel density).
post #25 of 79
Quote:
Originally Posted by addicted44 View Post

Apple does't want you to upgrade your iPhone4 to the iPhone5.


Apple wants everybody and their brother (literally!) to upgrade or switch to the i5.

More people carry the i4 than any other iPhone. And you think that Apple would prefer that they NOT give Apple more money? Wacky theory.
post #26 of 79
Quote:
Originally Posted by iKol View Post

The 3GS is a great phone - never had any reception problems with it like my iPhone 4 nor delicacy issues.
All it needs is a cameraflash added- forget FaceTime, a gimmick at most.

Facetime is pretty awesome for me personally. My problem with it was (lost my i4...living with the original with edge until the 4S is out) that it did not work on 3G. The rumormill was apparently saying that iOS5 will allow this to happen.
post #27 of 79
This makes no sense. The iPhone 4 is already being sold for free with a 2 year-contract in many markets. I'm most likely going to be picking one up myself next week.

The 3GS is dead.
post #28 of 79
Quote:
Originally Posted by ConradJoe View Post

Apple wants everybody and their brother (literally!) to upgrade or switch to the i5.

More people carry the i4 than any other iPhone. And you think that Apple would prefer that they NOT give Apple more money? Wacky theory.

Of course they want you to upgrade.

But the point is that the 4S wouldnt be targeted towards iPhone 4 users, as much as 3GS users.

The vast majority of iPhone users in the world are on a 2yr+ contract, who will wait for that contract to expire before upgrading. It is these people, upgrading from a 3GS, who will find immense value in the iPhone 5. The vast majority of iPhone 4 users would not upgrade until next year anyways.

Those who would have upgraded if Apple was releasing an iPhone 5, instead of 4S (whatever that may mean) are on the margins, and probably too small a number to justify a product strategy based on them.
post #29 of 79
Quote:
Originally Posted by AbsoluteDesignz View Post

yea that makes sense...but then again any app designed for 480x360 scales perfectly to 960x720...

the only reason to get rid of the 3GS is because it is seriously outdated.

Is it? Consider it a line of non-retina display phones. They may increased the processor power in that line going forward but it can be a model for the cheaper market.

the 3GS is not noticeably slower than the iPhone 4. Most of you are happy that is still selling on Oct 3rd, why care on Oct 4th?

So APple have an entry level phone, outselling all android phones ( how often have we heard that on this forum) and you want to get rid?

If the price is reduced it will sell to cheaper markets - teenagers, older folks etc. PAYG. China. etc.

This is inevitable as they need a cheaper phone for China.
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post #30 of 79
Quote:
Originally Posted by addicted44 View Post

Of course they want you to upgrade.

But the point is that the 4S wouldnt be targeted towards iPhone 4 users, as much as 3GS users.

The vast majority of iPhone users in the world are on a 2yr+ contract, who will wait for that contract to expire before upgrading. It is these people, upgrading from a 3GS, who will find immense value in the iPhone 5. The vast majority of iPhone 4 users would not upgrade until next year anyways.

Those who would have upgraded if Apple was releasing an iPhone 5, instead of 4S (whatever that may mean) are on the margins, and probably too small a number to justify a product strategy based on them.

Really doubt that last bit. The number of people who own an iPhone 3Gs from two years ago is a tiny percentage of the total iPhone ownership now because the growth in iPhone users has been exponential. If all Apple gets is the upgraders in their ( supposed) 2 year universal contracts, then it wont sell that many.

It needs to convince iPhone 4 users to break contract, or upgrade early, and new entrants to buy their first iPhone. That will exceed the 3GS users, in a tiny number of countries, who bought as new and have a 3GS for 2 years or more.

The modern 3GS user, who bought the 8G version, is not going to upgrade to the iPhone 4S, but may get a deal on the iPhone 4.

The new 3GS is for the lower-mid market.
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post #31 of 79
off contract prices for phones are just re-god-damn-ridiculous. When you compare them to what you get with tablets. It's just insane.
post #32 of 79
Quote:
Originally Posted by tonton View Post

This makes no sense. The iPhone 4 is already being sold for free with a 2 year-contract in many markets. I'm most likely going to be picking one up myself next week.

The 3GS is dead.

God, the arguments on this forum bug me. The contract price is irrelevant.
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post #33 of 79
Quote:
Originally Posted by archer75 View Post

off contract prices for phones are just re-god-damn-ridiculous. When you compare them to what you get with tablets. It's just insane.

Word.

The "cheap" cost here is the same as an entry level iPad. And far more than the Fire.
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post #34 of 79
Would be seriously good for T if they can pull it off with Apple. (IMHO)

If Apple can keep up with manufacturing, there's still a good profit in it, demand is solid, it's iOS 5 compatible (for what other reason? - perhaps they almost had to because of iOS5 on iPad 1 w/ GSM) - it's all gravy. I think stock holders are happier with larger earnings per share, volume shipped and market share than a small down tick in margin %. Perhaps I'm just projecting.
post #35 of 79
Quote:
Originally Posted by Negafox View Post

Using Safari on my iPhone 3GS under iOS 4 is a painful experience. It frequently crashes or displays most of a webpage in the gray checkerboard look for a while until it finishes loading. Maybe iOS 5 has more optimizations for the 3GS, but personally, I would opt to kill the line and let the 8 GB iPhone 4 become the new low-end model.

The free Android phones are generally on par with the iPhone 4. Apple ought to kill the line than to compete with an aging phone that performs poorly compared to its direct competition.

It is funny, every person i actually know face to face style who has ever owned any Android model and also used any iPhone says that no Android is on par with even the 3G, let alone the 3GS. My own testing of Android leads me to believe that it is the mobil phone version of windows 95. All the virus worries, all the instability, some pretty colors, and basically useless.

Yet regularly people say Android phones are as good or better. I have just never actually met that person...

Example of what i am saying here, http://jawcl.com/post/10648454899/wh...g-with-android
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post #36 of 79
Quote:
Originally Posted by shen View Post

It is funny, every person i actually know face to face style who has ever owned any Android model and also used any iPhone says that no Android is on par with even the 3G, let alone the 3GS.

Maybe it's time to expand your social circle.
post #37 of 79
Quote:
Originally Posted by shen View Post

It is funny, every person i actually know face to face style who has ever owned any Android model and also used any iPhone says that no Android is on par with even the 3G, let alone the 3GS. My own testing of Android leads me to believe that it is the mobil phone version of windows 95. All the virus worries, all the instability, some pretty colors, and basically useless.

Yet regularly people say Android phones are as good or better. I have just never actually met that person...

People on these here forums will have a different opinion on the 3GS - which I have and think still better than most Android phones I have used - if they are defending it against Android, or if there is a rumour that it might be kept on to cater to the undeserving poor. Its Apple fans wanting to keep a clique I think.

If the 3GS is a popular model now, it will be even more popular when it is reduced in price. To put it simply Apple will sell more of the 3GS + iP4 + iP4S then they would've of the iP4 + iP4S alone.

Frankly they need an even cheaper model. But they do need a cheap model (Off contract prices)* for the rest of the world and the PAYG market, and it makes sense to use a phone they can build comfortably and well. Also I like it's form factor.

As for margins, it is selling at $399 according to the article. The parts must be cheap. This is a high margin phone. Same price as an iPad retail, parts are cheaper.


* will put that everywhere from now on, I think, when I mention price.
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post #38 of 79
Quote:
Originally Posted by asdasd View Post

Is it? Consider it a line of non-retina display phones. They may increased the processor power in that line going forward but it can be a model for the cheaper market.

the 3GS is not noticeably slower than the iPhone 4. Most of you are happy that is still selling on Oct 3rd, why care on Oct 4th?

So APple have an entry level phone, outselling all android phones ( how often have we heard that on this forum) and you want to get rid?

If the price is reduced it will sell to cheaper markets - teenagers, older folks etc. PAYG. China. etc.

This is inevitable as they need a cheaper phone for China.

like I said, the only reason to get rid of it is because it is outdated. Granted at it's price it is less outdated than the lower end Android models.
post #39 of 79
Quote:
Originally Posted by shen View Post

It is funny, every person i actually know face to face style who has ever owned any Android model and also used any iPhone says that no Android is on par with even the 3G, let alone the 3GS. My own testing of Android leads me to believe that it is the mobil phone version of windows 95. All the virus worries, all the instability, some pretty colors, and basically useless.

Yet regularly people say Android phones are as good or better. I have just never actually met that person...

Example of what i am saying here, http://jawcl.com/post/10648454899/wh...g-with-android


lol @ Android not being on par with a 3G...the friend of mines who "upgraded" from the Nexus One (mine) to her own iPhone 4 still misses aspects of Android that she just cannot get/do on iOS...


and guess what? that's OKAY. She is still happy with her iPhone 4. They can coexist...it doesn't always have to be either or.

Android doesn't have to be all bad and iOS doesn't have to be all good.

Simply because you are a fan of Apple through and through doesn't make them the makers of all the good products in the world....And that's OKAY.

The sun will rise, the sun will set...the universe will go on as it should...and that's OKAY.

Every post you have re: Android doesn't have to be a negative "I heard she heard" story. I bet you could find 100 articles on why Android rocks (without even comparing it to iOS)...or 200 why it sucks...but that's OKAY.

It proves nothing. Simply that your tastes are not mines or others tastes when it comes to MOBILE operating systems.

You don't have to hate Android, Shen...hell, you don't have to hate Google...or Adobe, or Microsoft, or any company/product that competes with Apple.

You can not enjoy them all you want (BB OS scars my soul and stock Android is hideous but it's customizability saves it) but you don't have to hate what others enjoy.

And that's okay.




hey I'm still waiting for you here: http://forums.appleinsider.com/showp...&postcount=193

I don't want to consider you a liar or anything....
post #40 of 79
Quote:
Originally Posted by AbsoluteDesignz View Post

lol @ Android not being on par with a 3G...the friend of mines who "upgraded" from the Nexus One (mine) to her own iPhone 4 still misses aspects of Android that she just cannot get/do on iOS...

I have never seen you mention aspects of Android-based phones that can't compare with an iPhone.
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