Apple iPhone 3GS is seeing huge demand even after being around for two years

When Apple introduced the iPhone 4S earlier this month, it also made some changes to its iPhone family at the low end. The company introduced a cut down iPhone 4 with only 8GB of memory for $99 with a two-year contract. In addition, the boys from Cupertino decided to let the iPhone 3GS (8GB) soldier on for yet another year as a free smartphone with a two-year contract.

That move has proven to be quite beneficial for AT&T, which has already seen its wireless subscriber count pass the 100 million threshold in the past quarter. AT&T Mobility CEO Ralph de la Vega today explained:
I also mentioned in my notes that we have another device that I think is going to dramatically change those people that are on smartphones and quick messaging devices, the 3GS, which is free with a 2-year contract. We've seen a tremendous, tremendous demand for that device even though it's a generation old. And actually, we're getting more new subscribers coming on the 3GS on the average than other devices. So we also have an inventory sold out on that device. 
Given the jump in battery life, speed, display resolution, and build quality going from the "free" iPhone 3GS to even the $99 iPhone 4, one would think that many people wouldn't mind spending $100 (an extra $4/month over the course of a two-year contract) to get a newer phone. However, for many customers, free is all they need to see to sign on the dotted line.
Interestingly enough, two can play at the game when it comes to cheap phones. Verizon Wireless (through Amazon Wireless) is currently offering a number of current generation Android smartphones for just a penny with a new two-year contract. Everything from Motorola Droid Bionic 4G to the HTC Thunderbolt 4G to the Motorola Droid X2 can be had for the low price of entry.

Sources: Mac Rumors, Seeking Alpha

"Folks that want porn can buy an Android phone." -- Steve Jobs

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