After announcing the iPhone 4S pricing at its “Let’s Talk iPhone” event on October 4th, Apple also announced that it would be further reducing the pricing for the older generation iPhone 3GS 8GB from $49 to $0 with a 2-year carrier agreement.

According to President and CEO of AT&T Mobility Ralph de la Vega, this price drop has translated to “tremendous” demand for the device… 

“We have another device that I think is going to dramatically change those people that are on smartphones and quick messaging devices, the [iPhone] 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.”

Additionally he states that, similar to Apple, AT&T reported slower numbers this quarter due to the next-generation iPhone launching in the fourth quarter. AT&T expects numbers to spike dramatically in the holiday quarter with increased sales of the iPhone 4S.

I have to admit, Apple was very smart in offering the iPhone at various price points, with the iPhone 3GS 8GB as a free option, the iPhone 4 8GB at $99, and the new iPhone 4S available starting at $199.99 for 16GB.

Do you know of someone who recently bought an iPhone 3GS? Do you think that the older handset will continue to stay relevant as newer smartphones hit the market?

[MacRumors]