With the release of the iPhone 5, older Apple handsets will be made available at far lower prices. Apple is apparently planning to keep the two-year-old iPhone 3GS in its line-up, offering it for free with on a 2-year contract, or at an unsubsidised price of $399.
According to analyst Mike Abramsky, quoted by AppleInsider, at Apple's big iPhone event today we are likely to see a completely new iPhone (either named iPhone 5 or 4S) but not a new lower-end model that was rumoured to be meant for entry users.
Instead, Apple will reduce the prices of existing models in order to appeal to larger less well-off markets. This strategy is particularly aimed at the huge Chinese prepaid wireless market.
Mike Abramsky predicts that the prices for the iPhone 4, released last year, will drop to $99 with a carrier contract and to $499 contract free. The iPhone 3GS, already on the market for 28 months, will be kept in the prepaid offers but it will be put forward for free with a carrier contract. The subsidised price for the iPhone 3GS has dropped from $99, in June last year after the release of iPhone 4 and again in January 2011, when it was offered at $49.
With the fifth generation iPhone and a lower price for existing models, Apple has heavy weapons in the war with Google and the legion of Android devices. So, if you wanted an iPhone 4 but couldn't afford it, now could be the right time!