Report: $350 Contract-Free iPhone to Arrive This Year, but There’s a Catch

Apple is ready to tap the lower, mid, and high-end price segments in the smartphone market by releasing a contract-free, $350 iPhone this year, according to a new report.

Citing an incredibly solid source, BGR claims to have learned that Apple will be launching a pre-paid iPhone this year at a much lower cost than the current-generation iPhone sold without a contract.

The blog says this iPhone will go for $350 tops, and that it will be sold without a contract.

Customers would get to pick their carrier without having to jailbreak and unlock.

There’s a catch, though. Apple is likely not developing new hardware for this announcement.

It’s actually quite possible that this $350 phone is actually the old iPhone 3GS.

With the introduction of the iPhone 5, the iPhone 4 would also see a price drop, thus allowing Apple to compete in not one, but three segments of the cell phone industry.

Ask any analyst and they’ll say this make a lot of sense. The only question remaining is ‘when?’

Some have their money on a September launch of the iPhone 5. Others maintain that it will only see the light of day in 2012.

The reason is that the entire industry feels there’s a good chance Apple will release an iPhone 4S this year, leaving the iPhone 5 for next year.

Either way, Apple’s cheaper iPhone should land no later than fall 2011.

Previously, this device was believed to be an iPhone nano or iPone mini.

However, the Apple-centric blogosphere has had to rely on highly unconvincing concept designs to report on such news.

The iPhone 3GS sounds like a much more plausible replacement to the iPhone rumored nano.