Matthew Panzarino for TheNextWeb
The iPhone ‘next’ would be the flagship, the iPhone 4S would offer Siri and take the place of the 4 in the pricing lineup, and the 3GS would remain ‘free’ on contract. But, if the prices were right, Apple could expand the 3GS from a contract device to an off-contract pre-paid model that might finally give the company a horse in the developing nations race.
The iPhone business is still an evolving one for Apple. It may be their largest money maker already right now but they can still tweak this into something bigger as the prepaid and emerging markets are still a little bit beyond the iPhone.
Apple used to sell one model iPhone, now they sell three, two of which are identical. When Apple introduces the next iPhone, it could drop the 3GS off for being too old or it could decide that having two identical phones is confusing and kill off iPhone 4.
Having the 3GS and 4S alongside the upcoming model makes sense to me because the three models are different enough to be aimed at different market segments, similar to how the iPod line up has different models for different markets and purposes.
The 3GS could be the low cost iPhone primarily aimed at prepaid or emerging markets in which consumers buy phones outright with no carrier subsidies. The phone currently costs around $400-450 outright. If Apple can drop that even further, it would be a boon in emerging markets as well as among the lower income bracket.
The 3GS has allowed Apple to enter the lower price range without having to create another phone specifically for that purpose. Thanks to the decision to include the 3GS in iOS 6 deployment, the phone will remain current at least until 2013. Buyers of the 3GS won’t feel too left out as it will still carry many of the features available to the newer iPhones.
The 3GS may be free with a two year contract in the US, but in markets with no carrier contracts, it’s far from free. If Apple can offer it for $300 or less, it would sway a lot of buyers who may otherwise go for Android, Windows Phone, or even BlackBerry.
The 3GS would still be competitive against the midrange Samsung and HTC phones and the lure of iMessage, Line, and WhatsApp would go some way to keep BlackBerry at bay.
The iPhone 4S essentially is an upgrade to the iPhone 4 so I’d rather see the iPhone 4 killed off than the 3GS. The 4S can be the mid-range phone that offers most of the features in iOS 6, limited in hardware features due to the technical inferiority compared to the upcoming iPhone.
The iPhone 4 of course offers more than the 3GS but why go with 4 when the 4S offers much of the same but better? The 3GS would cost less to manufacture too which means it would be more affordable to consumers. Both 3GS and 4 also do not have Siri. Rather than have a phone that looks similar but has fewer features, might as well go with the one that actually looks different.
These technical barriers are why it makes sense to have the iPhone 4 killed off instead of the 3GS. The 3GS is distinct enough to be a different iPhone yet still offer many of the features in iOS 6. The average consumer would immediately know the difference and understand why certain hardware oriented features like video calling, 3D mapping, built-in turn by turn navigation, and Siri aren’t available on their iPhone.
The 3GS is also less likely to break or shatter when dropped from a height of three feet or so. For a low cost phone, that resilience is more important compared to the more expensive phones since people are more likely to buy cases for those.
On top of that, it’s unlikely for Apple to offer the iPhone 4 outright for $350 or less. And this is probably the biggest reason for Apple to stick with iPhone 3GS instead of iPhone 4.
[Update] Alternatively, what John Gruber said. 3GS goes cheap for markets outside of the USA and iPhone 4 takes 3GS’s place as the “free” phone on US carriers. This might complicate matters a little bit in International markets though.
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