Apple Announces “Cheaper” iPhones: The Old Ones

in techcrunch

Despite predictions to the contrary, Apple did not announce a cheaper, mass market version of the iPhone today. Instead, it announced an upgraded iPhone 4 called the iPhone 4S. It’s the same on the outside, but with all new insides.

However, there are more affordable iPhones now on the market: the old ones. Apple says it’s keeping the iPhone 3GS and iPhone 4 around. Not only that, it’s dropping their prices. Why would Apple keep these aging devices alive? Simple. To battle Android, Symbian, RIM and Windows Phone – especially in emerging markets.

According to today’s announcement, the iPhone 3GS is now free with a contract. The iPhone 4 has been reduced to $99. While the new lower prices are based on 2-year agreements with mobile carriers, the fact that the phones are not being killed off entirely is important.

These are the “new” cheaper, mass market iPhones.

Apple didn’t specify where these discounted devices would be sold, only noting that the iPhone 4S would be available in the U.S., Canada, Australia, U.K., France, Germany and Japan. It would not be surprising to see these older models used as Apple’s inroads into emerging markets, though.

Here’s why:

More people are buying Android smartphones than iPhones. That fact is not in dispute.

According to recent estimates from comScore, Android’s U.S. market share is 41.8% to Apple’s 27%. In Europe, where Symbian still reigns, it’s 22.3% for Android vs. 20.3% for iPhone. Worldwide, some analysts now peg Android as having nearly 50% of the smartphone market.

What iPhone lacks in volume, though, it makes up for in profit, capturing two-thirds of available mobile phone profits in Q2 2011. One could even argue that Apple does not need to provide a low-cost iPhone – it was doing just fine without one, thank you very much.