Apple will offer free iPhone 3GS with 2-year mobile contract

Mike Abramsky, Analyst at RBC Capital Markets, expects that Apple might offer the iPhone 3GS for free with 2-year contract after the iPhone 5 launch; that step will obviously attract mid-market buyers.

"While a $49 iPhone is already available (AT&T), psychologically a $0 iPhone provides a compelling offer," Abramsky wrote in a note to investors. "Proprietary survey data... suggests 14% are very/somewhat likely to buy the iPhone 3GS for free with 2-year contract, exceeding buying interest for the iPad (13%) and original iPhone (9%)."

Abramsky suggest that free iPhone 3GS will increase iPhone numbers to more than 150 million smartphones. That will be unusual for Apple, because the company always discontinues its two-year-old smartphones. For example, after launch of the iPhone 4, the iPhone 3GS, first released in 2009, was dropped to $99, and the iPhone 3G was discontinued. Noteworthy to say that despite the fact that the iPhone 3GS was first released in 2009, it will be compatible with the iOS 5.