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Apple To Launch Free iPhone 3GS With iPhone 5 Says Analyst

One of the more vocal and well known Apple analysts, Mike Abramsky of investment bank RBC, issued a note earlier today saying that Apple will not release a cheaper version of the iPhone 4 at the same time as the new iPhone 5.

Instead, Business Insider noted (opens in new tab), Apple will maintain THREE separate iPhone products, the iPhone 3GS, the iPhone 4 and the iPhone 5 at three separate price points, $0, $99 and $199/$299 with the cheapest of the lot costing $399 unlocked and SIM Free.

Abramsky's conclusion came after RBC carried out a survey which found out that consumers would buy more iPhone handsets if they were free with the contracts.

Arguably, Abramsky's argument is flawed on several levels. Firstly, it will be a logistical nightmare for Apple having to deal with one more set of SKUs and make its own portfolio slightly more crowded.

Secondly, it will make life for developers a tad more complicated as they will need to cater for different screen resolutions and SoCs with huge performance differences.

Furthermore, the 3GS will very likely be the next Apple handset to be phased out when the next major iOS update is released and because of the lack of a front facing camera and sheer raw power, it cannot support some of Apple iOS5's more exciting features (Facetime, iCloud etc).

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.