Maybe you've decided to get an iPhone but you're still not entirely sold on the $199+ iPhone 4S. Maybe the $99 iPhone 4 or free-on-contract iPhone 3GS seem like cheaper options? Fair enough. That's why Apple currently has 3 iPhone models on the market, with 3 different levels of specs, and at 3 price points.
Over the lifetime of a contract, you'll be paying a couple thousand dollars, so it's important to run the math on this and see what suits you best. Let's do that now.
For the last few years, when Apple's introduced a new iPhone, they've kept the previous year's model around, with reduced storage, and at a reduced price point. This year, they've kept the last two years' models around, and they've reduced the price point of the oldest one to zero.
2009's iPhone 3GS with 8GB of storage fills Apple's budget smartphone slot right now, and fills it at the lowest price point ever. It's still a good phone, especially compared to the typical candybar or flip feature phones (dumb phones) that typically come free with carrier contracts. It still has the App Store and the Safari browser, and most of what iOS 5 has to offer.
What it doesn't have is a crystal clear, pixel-free Retina display, a front-facing camera for FaceTime video calls, the ability to shoot HD video, and the premium build and power of the higher end models.
If you literally have no money in your pocket walking in and really want an iPhone, if you're shopping for a teen and don't want to risk a higher end phone, if you're brand new and just dipping your toes into the smartphone market and don't want to dip too deeply, iPhone 3GS can be a good starter smartphone.
2010's iPhone 4 with 8GB of storage is Apple's new low-cost iPhone option. Externally, it's almost identical to the new iPhone 4S, so much so that almost no one will be able to tell which one you have at a glance. It has the same Retina display and front-facing FaceTime camera for video calls, along with a snappy Apple A4 processor and a good quality, 5 megapixel camera capable of shooting 720p HD video. It also runs almost everything iOS 5 has to offer.
What iPhone 4 doesn't have is the 2x faster, 7x more graphically powerful Apple A5 processor, the great 8 megapixel, 1080p camera, or the artificially intelligent Siri voice control system of its newer, better brother. Also, 8GB of storage may not get you very far with a device this good at gaming, media, photos, and video.
If you absolutely can't scrape together the $199 needed for an iPhone 4S, but want something better than the iPhone 3GS, this is your middle ground. With the new software update, it's still a great iPhone. It's just not the best iPhone any more.
2011's iPhone 4S is the new king of the hill, the new flagship in Apple's line of mobile devices. It has everything the previous generations had to offer and more. The new Apple A5 processor gives it 2x the speed and 7x the graphics power of the iPhone 4. The new camera gives it 8 megapixel photos with more light sensitivity and better sharpness, and 1080p video. The new Siri voice control system provides a natural language interface so you can literally talk with your iPhone, ask it to do things for you, and it will answer back and do them.
Apple offers iPhone 4S at three price points depending on the amount of storage:
If you know you want a top of the line iPhone, with every feature and function Apple provides, then you want an iPhone 4S. If you're not sure which iPhone 4S you want, or on which carrier, or in which color, then fret not, we've got you covered.
Before you make up your mind, it's important to remember that while the iPhone 4GS is free and the 64GB iPhone 4S is $399, all of those prices require a 2 year contract in the US (other countries may have longer or shorter contract terms).
When you combine voice and data plans, text and other packages, the total cost could easily work out to $2000 or more over those 2 years.
$100 or even $399 isn't as big an amount when you consider the 24 month carrier commitment and total cost of ownership of your phone.
If you're still not sure, hit up our iPhone Forums to get the help you need to make up your mind.