Apple is set to finally hit the $0 on-contract mark with its entry-level iPhone 3GS once it launches the next-generation iPhone 5 later this year. In a note to investors on Wednesday, RBC Capital Markets General Manager Mike Abramsky claims Apple is expected to finally offer the phone for free in an effort to aggressively attack mid-market smartphone buyers and counter Android’s momentum. Abramsky sees this move more than doubling Apple’s global addressable market to 150 million smartphones, up from 64 million, and it will drastically accelerate Apple’s growth outside North America. In the U.S., this of course begs the question, how will Verizon Wireless stay competitive with AT&T? Apple does not currently offer a CDMA iPhone 3GS, so the carrier would be unable to match AT&T with mid-market customers. Add to that AT&T’s attractive $15 data plan option versus Verizon’s minimum $30 plan, and subscribers looking for an iPhone on a budget will really only have one place to look. Abramsky currently has an Outperform rating on Apple stock with a price target of $450.
Following BGR’s exclusive reports, Best Buy has confirmed that it is offering Apple’s iPhone 3GS for free during a one-day only sale. Best Buy also clarified that the offer is only available at Best Buy store locations, and is limited to one per customer:
In response to customer demand and interest, Best Buy confirms that it is offering the iPhone 3GS for free with 2-year new or upgrade activation as a special one-day event on Friday, Dec. 10, 2010. The offer is in-store only, good while supplies last and limited to one phone per customer.
The free iPhone 3GS deal requires a two-year service contract with AT&T, and it is available to both new customers and existing subscribers currently eligible for an upgrade. Best Buy also noted Friday that stock are limited and the promotion is only good while supplies last. More →