The iPhone 3GS: Apple’s New “El Cheap-o” iPhone Model

Tech analysts have long bristled at the notion that Apple would ever offer a pre-paid “el cheap-o” iPhone. But the iPhone 3GS is still hanging tough for the sweet price of $ 0, giving iPhone hopefuls the closest thing to an “el cheap-o” iPhone model.

For months, I, along with other tech writers, scoffed at the notion that Apple would ever have three iPhone models on the market at one time, and/or that one of them would be an “el cheap-o” model. And yet, that is exactly what Apple has done. I totally called that one wrong.

Granted, Apple didn’t do it in the way that some thought they would; they didn’t release some stripped-down iPhone, or co-release two new iPhone models. Instead, they have just kept the iPhone 3GS around, dropped its price tag to $ 0, and now are giving prospective iPhone customers three distinct pricing options at BusinessWeek has a good article about it, commenting that “Apple Inc.’s iPhone 3GS model is more than two years old and shunned by gadget snobs, and yet it’s turning into one of the company’s bigger weapons against devices running Google Inc.’s Android software this holiday season.”

By doing it this way — keeping the iPhone 3GS around along with the 4 and 4S —  they have avoided the “gas pump” problem that I postulated in the Summer, suggesting that an iPhone 4, 4S, and 5 would confuse consumers, and that the 4S would be like “Plus” grade gasoline.

Instead, the iPhone 3GS occupies a unique place in the smartphone marketplace: it is not a “stripped down” iPhone, but rather a legacy device that was once a powerhouse. It is like having the opportunity to purchase a Miami Vice-style Ferrari Testarossa from the 80s that is in pristine condition. Sure, it may not at the same level as a 2011 model, but you’re still getting an exceptional sports car.

And all indications are that, in spite of some early reports that said the opposite, the iPhone 3GS is holding its own with iOS 5 . . .and even Siri!

Christian Post is is reporting that “During yesterday’s Siri port stories, it turns out the iPhone 3GS worked better with the artificial intelligence system than the iPhone 4.” The article goes on to report on the porting tests, and how the 3GS can handle Siri with few problems at all.

Some are going so far as to say that, pound for pound, the iPhone 3GS is still the best of the current three iPhones being offered, based on price to performance ratios. That’s the claim that Industry Today is making, noting that in the UK, carriers are offering as much as £150 in instant cash back when people purchase the iPhone 3GS. To be sure, it might be overstating it a bit to make such a claim, but even if you take the hyperbole out, there is a truism to the viability of the iPhone 3GS: it still holds it own in the smartphone market as an impressive smartphone that you can essentially get for free.

Will the iPhone 3GS Still Be Around Once the iPhone 5 Is Released?

Given the impressive longevity of the iPhone 3GS, could it still be available once the iPhone 5 is released? Most likely not: I can find no evidence to support the notion that the 3GS is still being produced. The reason why it is still available is simply that, when it was first released, the 3GS didn’t sell like hotcakes like the 4 and 4S have. Also, the 3GS was — and still is — available on AT&T only. And given that AT&T has already sold out of it, it is safe to assume that it probably won’t last.

But what do I know?

For all we know, Apple has warehouses full of 3GSs, and in the end, we’ll have the iPhone 5, 4S, 4, and 3GS — one big, happy family of iPhones to compete against the likes of Android and its multiple price-tiers of smartphones.


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