The Telegraph is reporting that Apple will likely finally drop the iPhone 3GS form it’s product lineup once the next-generation iPhone is introduced next week. The iPhone 4 will then likely take the 3GS’ place as the free on-contract device. The report then suggests that the company will move the iPhone 4S to the iPhone 4′s current location as the $99 model. This new iPhone 4S would come in an 8GB capacity. The report goes on to note that the new iPhone is expected to come in three storage capacities, which will likely be the same 16/32/64GB capacities as found in the iPhone 4S.
This prediction hardly seems like a stretch. It seems likely that Apple will move all the models down a tier. With the iPhone 4, the first phone to be offered on more than one carrier here in the United States, now being a free on-contract device for all carriers, compared to the 3GS being a free device only for AT&T customers.
The iPhone 3GS would be sorely missed in Apple’s emerging markets such as China, where the device is offered contract-free and for 2888 yuan ($455). If Apple were to continue selling this device, even after the next-generation iPhone is introduced, it wouldn’t a surprise if the cost of the device dropped even further, allowing the iPhone brand to make its way into even more markets. I can see Apple keeping the iPhone 3GS around in emerging markets precisely for that reason- to gain market share.