With Verizon getting its hands on the iPhone 4 this month, AT&T have been scrambling to keep their existing customers by offering more data, free micro-cells and giving away their first born children. Clearly not convinced that’s going to work, the 2nd largest carrier in the United States is now trying a new approach – offering a cheap iPhone.

Now AT&T started selling Apple’s iPhone 3GS (in 8GB guise) for just $49, though the small print does indeed mention the necessary two year contract. The panicking cell phone carrier has even put together a new ad to whet the appetite.

It’s going to be interesting to see how this works out for AT&T, especially with the iPhone 4 on the same stands as the 3GS. Have price-conscious buyers been waiting for a cheap iPhone or have they already either ponied up or gone for an Android handset?

One thing is for sure though – that two year contract sure seems a long time when your new phone will be nearly three generations old by the time it’s over.

{Via: Engadget}

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