Following the introduction of the iPhone 4S, Apple Inc. (AAPL) iPhone 3GS dropped down to $99 and eventually was available for free with a 2 year contract. According to a report from The Telegraph, Apple is now making moves to introduce an 8GB iPhone 4S for $99 and eliminate the iPhone 3GS altogether.
This would allow for the iPhone 4 to remain and take the place of the 3GS as free on contract option for users. An iPhone 4 for free with a two year contract would also give users many options, with both GSM and CDMA as the free iPhone 3GS was limited to AT&T subscribers only.
The new update will mean that the 8GB version of the iPhone 4 will be the entry-level iPhone, probably given away free on £20 per month contracts, as the 3GS is currently. Sources close to retailers also suggested that an 8GB version of the 4S could be introduced.
The report also mentions that the iPhone 5, to be introduced next Wednesday will be available in three capacities, 16 GB/32 GB/64 GB. They will likely all be available with the same price points of the iPhone 4S upon introduction, $199/$299/$399. It makes sense for Apple to phase out the iPhone 3GS, as it would not run apps much like the newer iPhones.
The iPhone 4 as the free on contract option would allow for all of Apple’s device to be in sync in terms of design and features, offering FaceTime, CDMA networking, and a faster A4 chip. The iPhone 5 is scheduled to be announced next week, on September 12th and is expected to go on sale on September 21st.