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AT&T Seeing "Tremendous Demand" for Free iPhone 3GS

In a conference call with analysts this afternoon, Ralph de la Vega, President and CEO of AT&T Mobility discussed the impact of the recent price drop on older-generation iPhones, particularly the iPhone 3GS. That phone is the first iPhone be offered free with 2-year contract in the U.S.
We have another device that I think is going to dramatically change those people that are on smartphones and quick messaging devices, the [iPhone] 3GS, which is free with a 2-year contract. We've seen a tremendous, tremendous demand for that device even though it's a generation old. And actually, we're getting more new subscribers coming on the 3GS on the average than other devices. So we also have an inventory sold out on that device.
De la Vega also noted that AT&T, like Apple, had slightly slower numbers this quarter as a result of the next-generation iPhone launching in the fourth calendar quarter versus the third. He expects AT&T's numbers to surge in the holiday quarter with the launch of the iPhone 4S, saying the company was "very, very optimistic on what the fourth quarter is going to look like in terms of smartphone growth."

Top Rated Comments

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38 months ago
The iPhone 3GS is a rock solid,good smartphone.
Rating: 28 Votes
38 months ago
Which seems silly to me.

Free + $1680 over the two year contract for the cheapest voice+data plans.

Chip in an extra $100 or $200 to get a 4 or 4S.

But then most people never calculate how much that 2 year contract costs them for their 'free' phone. :)
Rating: 23 Votes
38 months ago


We've seen a tremendous, tremendous demand for that device even though it's a generation old.


Isn't it two generations old?
iPhone 4S=last/current generation
iPhone 4=1 generation old
iPhone 3GS=2 generations old
Rating: 22 Votes
38 months ago

Which seems silly to me.

Free + $1680 over the two contract for the cheapest voice+data plans.

Chip in an extra $100 or $200 to get a 4 or 4S.

But then most people never calculate how much that 2 year contract costs them for their 'free' phone. :)

Uh, yeah. The service costs the same whether you get a subsidized phone or not so free is free.

This is really going to cause nightmares for Google and their partners as not only is this a "Free" phone but it also runs the latest iOS 5 unlike a lot of android phones out there which will never receive an update from the handset maker.

@ChrisA: You might want to not call people stupid if you don't realize that you are going to pay the same for the service whether you are on a contract or not and whether you receive a subsidized phone or not. Hardware upgrades are a loss leader for carriers to get you to sign up for a contract. Contracts give some kind of guarantee that you will continue using their service months down the road.

You can sometimes negotiate what is called a "retention" plan after your original contract is up but that usually does not give you access to a subsidized phone but just gives you a lower rate.
Rating: 20 Votes
38 months ago

wow.. don't people realize how old this phone is? Oh well some may enjoy it and if they can great.


Some people don't care. They are enamored by the "free"-ness of it. I'm actually curious as to the number of Android devices which were just free or almost free. I have heard of some people getting them because they're "like an iPhone but cheaper."
Rating: 15 Votes
38 months ago
WOW when $375 is FREE?

it is FREE with two year contract...

minimum voice and data plan = $40 + $15 = $55 x 24 = $1320
Rating: 14 Votes
38 months ago
nothing is ever really free.
Rating: 13 Votes
38 months ago
And thus, the power of the $0 price point is demonstrated. This same phone was $49 before the 4S launch, which is less than 10% of the overall cost you pay for the entire contract.
Rating: 10 Votes
38 months ago
When I worked at an Apple Retail Store, there were lots of people who were willing to roll a data plan for their kids into their monthly family plan bill, but were unwilling to shell out $199 to buy them an iPhone.

Some people simply don't care about the latest gizmos and care more about how much money they actually have to shell out right now.
Rating: 9 Votes
38 months ago
Free is free.
Rating: 9 Votes

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