Apple's iPhone has been highly successful in terms of sales. After starting with a high price of $599 when the first iPhone went on sale in late June 2007, the price for the iPhone has gone down to just $199 for the cheapest model. However in order to get that price you have to sign on for a two year contract agreement. Now there are rumors that Apple might release an iPhone that's designed for a pre-paid business model with no need to sign a long term contract.
Apple Insider reports that Deutsche Bank financial analyst Chris Whitmore believes that Apple will launch what he is calling an "iPhone 4S" product alongside the fifth generation iPhone in September. The iPhone 4S, if it exists, could be priced between $300 and $500 by Apple. This phone would not need a long term contract but would work with a pre-paid phone plan. More and more wireless carriers are offering wireless phones, even smartphones with Android operating systems, under a pre-paid billing plan.
Whitmore states that such a pre-paid version of an iPhone might look more like an iPod Touch than a regular iPhone. He states, " ... we believe an 8GB iPod touch with an RF module could be priced ~$350 (unlocked without a contract)."
The article states that an iPhone that doesn't require a long time contract would likely expand the iPhone's reach especially in countries such as China, where the majority of wireless phone users are under a pre-paid business model.