Last Days for Apple's iPhone 3GS? Signs Point to Yes

Are you willing to buy planned obsolescence, even if it's still a pretty good deal? If so, you might want to head over to a Wal-Mart.

The retail giant has started selling the iPhone 3GS for just $97 with a two-year contract, well off the standard $199 asking price for the 16GB unit -- a sign that some in the industry are taking to mean that it's paring retail inventory in advance of the launch of a new iPhone.

Meanwhile, in another possible sign of a pending iPhone introduction, the mobile blog Boy Genius Reports said that the older iPhone 3G has been discontinued. It was not listed as available from either the Apple online store or AT&T's online store.

With each new iPhone introduction, Apple has made a habit of dropping the lineup's lowest-end model and cutting the price on the previous high-end unit. When Apple shipped the 3G in 2008, it ceased selling the original iPhone model. When the iPhone 3G debuted last summer, Apple cut the price of the 3G unit to $99, which then became the low end of the iPhone lineup.

Apple did not return a request for comment.

Still, not all the facts yet support the premise that Apple is cutting prices or retail inventory throughout its channels: The $299 32GB unit is not listed on the Wal-Mart site, but both the 16GB and 32GB model are still for sale on the AT&T Wireless Web site as well as Apple's (NASDAQ: AAPL) own retail site, and they carry their regular prices of $199 and $299, respectively.

If harbingers of a new iPhone introduction, however, the latest moves follow still other signs of the expected release of a new model. Leaks surfaced in recent weeks via a misplaced Apple prototype in Silicon Valley and what could be a similar leaked iPhone prototype in Vietnam, both of which suggested that Apple is hard at work on a revised device.

That timeline could support the introduction of a new iPhone at the upcoming Worldwide Developer Conference in June, in keeping with previous Apple launches -- which would also be in keeping with a widely expected plan that sees the 3G phased out, the 3GS becoming the low-end phone, and the new phone taking center stage. (While some industry observers have taken to calling the new, rumored model an "iPhone 4G," Apple's exclusive carrier partner, AT&T, does not yet operate a 4G network.)

Thanks to the recent leaks, the next-generation iPhone isn't likely to still have many secrets. It will almost certainly be a much more advanced phone than the 3GS, with more memory, storage and a faster processor.

Meanwhile, at what's apparently soon to be the lower end of Apple's iPhone lineup, will the lower price of the 3GS be enough to lure in buyers? Yes, according to Avi Greengart, research manager for mobile devices with Current Analysis.

"There's definitely a segment of the market that's price sensitive -- that's looking for this class of device but doesn't want to put out the money for the high-end," Greengart told InternetNews.com. "The best example of that is the 3G is still selling with the 3GS on the market."

Additionally, Apple has taken some steps to future-proof the 3GS for a while longer, making it clear that the upcoming iPhone OS 4.0 software will support the model, Greengart said.

"If you get the 3GS today, you will get most of the features of the 4.0 OS so long as they are not hardware-based," he added. Apple's iPhone OS 4.0 is slated to ship this summer.

Apple's Worldwide Developer Conference kicks off June 7, with an opening keynote by CEO Steve Jobs.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.


iPhone, Apple, smartphone, WWDC, 3G