Apple's Super Low-Cost Smartphone Could be the iPhone 3GS

There have been widely-reported but unconfirmed reports that Apple is going to offer a very inexpensive iPhone targeting the pre-paid market this fall. A supposedly reliable source indicates that the company is going to pull this off by keeping around a model that's two years old.

Not everyone wants to sign a multi-year wireless service contract. These people prefer to pre-pay for their service each month, so they aren't tied down with a long commitment to one carrier or service plan. As a result, they have to pay full price for their handsets.

Apple hasn't had any good solutions for this group. The least expensive version of the iPhone 4 (16GB) when bought without a contract, is $650. The price for the one with 32GB of storage is $750.

That will supposedly change in a few months. A new report coming from a source that BGR describes as "incredibly solid" indicates that Apple plans to offer a model that will cost just $350 without a contract. Rather than something new, this will be the iPhone 3GS, a device that debuted back in 2009.

Using an older model with specifications that are well behind the cutting edge will apparently enable Apple to sell a smartphone for such a low price -- a price that should have a much greater appeal to the pre-paid market.

A Range of Options
In addition, Apple will allegedly continue to offer the iPhone 4 at a lower price once the iPhone 5 is introduced, which is expected to happen in late summer or early fall. This will give the company a high-end, mid-range, and an entry-level smartphone.

If true, this won't be a radical change in strategy. Apple has a long-held practice of offering the previous year's model at a reduced cost. For example, the iPhone 3GS is available now from AT&T for $50. However, this model currently can't be purchased without a contract, and using Apple previous strategy will be discontinued when the iPhone 5 is unveiled -- unless Apple really has had a serious change of heart about the pre-paid market.

Source