iPhone 4s, iPhone 4, iPhone 3GS: Why did Apple Keep Three SKUs?

We were puzzled to see that Apple decided to stick to the 30-month-old iPhone 3GS for yet another year, which means that by June next year Apple may have a three year old phone in its portfolio.

We suspect that the main reason why the company chose this strategy, is to make sure that it has a handset that covers the increasingly competitive entry level where Android has been gaining significant marketshare,with the price of smartphones having dropped well below $100 or £100.

The iPhone 3GS has roughly the same configuration as the HTC Wildfire S but with a 50 per cent premium, and Apple said that it will be free on contract from all the major US network providers bar T-Mobile.

We believe though that the 3GS will be shortlived. Given that the Sony Ericsson Xperia Play, a vastly superior smartphone, can be had in the UK for around £150, it will be hard for Apple to justify keeping an obsolete model for very long.

This could either mean that Apple will revert back to a two-SKU model or will introduce an iPhone 5 when market conditions demand it. Which means that the new 8GB iPhone 4 could become Apple's new entry level smartphone before long.