What's this? The slow (by today's standard) and now free-with-two-year contract iPhone 3GS is sold out on AT&T? Yes way! You crazy iPhone people. This is exactly why we didn't get an iPhone 5 this year. People are still willing to eat two-year-old pie.
Speaking to analysts at a recent conference call, Ralph de la Vegas, AT&T CEO and President said:
I also mentioned in my notes that we have another device that I think is going to dramatically change those people that are on smartphones and quick messaging devices, the 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.
Free is great. It's a psychological barrier to shopping. As soon as people see "free," they forget everything else, even the strings attached. In this case, those strings are being stuck with AT&T's lousy service and forking over crazy monthly data plan fees to them for two years.
It's kind of nuts when you think about it. People are still buying a smartphone that only has a 3-megapixel camera, no HD video recording, no Retina Display, no FaceTime video chat and no fast A4 or A5 processor. The 3GS is still hanging around, but we don't expect it to be supported forever.
In the mean time, Ralph is probably extremely satisfied. Who needs to sell Android or BlackBerries when people are busting down the doors an iPhone 3GS?