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Apple’s iPhone 3GS Hitting the Prepaid Phone Market

Source: iPhone 3GS/ Apple

Apple is less likely to discontinue its iPhone 3GS later this year, as the company is said to sell the handset in developing markets. According to Jefferies analyst Peter Misek, the company made a deal with “a leading distribution and logistics company” that is intended to push the entry-level mobile phone in prepaid markets around the world.

Re-pricing the iPhone 3GS to Less Than $300.

In addition, the analyst believes that Apple has plans of re-pricing the iPhone 3GS, which currently costs $375 without contract. It is expected that the handset will cost around $250 to $350. This would enable a potential buyer to purchase the mobile phone without subsidy for a price that is almost the same as iPhone 4S on contract.

As of the moment, the iPhone 3GS is available for free with a two-year contract in major markets. It serves as Apple’s entry-level smartphone, while iPhone 4 is available for $99 with carrier subsidy.

What Lies Ahead for Apple Smartphones

The company is expected to launch its next-generation iPhone this October. On the other hand, if Apple will commence with its plan of discontinuing the production of iPhone 3GS later this year, then the iPhone 4 will become the company’s entry level smartphone. Furthermore, the iPhone 4S will reduce its price to $99 with a carrier subsidy.

Although there is the possibility of the fourth-generation iPhone to replace the 3GS model, it would also make sense if Apple would want to continue its production and distribute it to developing markets. That’s because this is where prepaid smartphones are popular. Moreover, the company may have plans to expand its iPhone sales in markets where it hasn’t made a significant impact yet.

Tapping the Developing Market

Developing markets are deemed as potential source of huge untapped consumers that could be beneficial for the company. In fact, there is one analysis conducted earlier this year which reveals that this type of market has 14 times more people between the ages of 25 and 34 than Western Europe and North America. The said age bracket is considered as smartphone-friendly age.

In addition, a report published by The Wall Street Journal earlier this year revealed that Android phones were “crushing the iPhone” in European countries that were affected by the debt crisis. Consumers from this market pay the full and unsubsidized price for smartphones.

Apple CEO Tim Cook pointed out the importance of the developing market to the company. He also said it was the reason why they continue to sell the iPhone 3GS, to achieve lower price points in the prepaid and postpaid markets.

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