iPhone 3GS to be free to buy when next iPhone is released?

RBC Capital Markets analyst Mike Abramsky claims that Apple will be keeping the iPhone 3GS around even after the next-generation iPhone is announced and the company will make the phone free on contract ($399 without one). Currently, Apple sells the 8 GB iPhone 3GS on AT&T for $49 with a two-year contract. 

It is interesting that Apple will elect to keep the iPhone 3GS around, two hardware cycles after it was first released. The iPhone 3GS was first released in 2009; Apple kept it around for people who don't want to buy the more expensive iPhone 4. If this rumor turns out to be true, then Apple may elect to keep the iPhone 3GS around because the update to the iPhone 4 will not be major enough for people not to want to upgrade to it. 

What do you think the reason will be? 


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