AT&T has been offering iPhone 3GS 8GB at $49 lately but Bell and Telus in Canada now have it on sale for $0 for a limited time. Sure it comes with a typically ridiculous 3-year contract, sure you can get the much better iPhone 4 on sale on the same networks for $159, sure you can get an unlocked iPhone 3GS straight from Apple for $549, but if you absolutely, positively have to have an iPhone for FREE (with contract!) get on over to Bell or Telus before the sale ends.

Anyone think iPhone 3GS at $0 is compelling? Want it on your network?

[Bell and Telus]

Apple is now selling the 8GB iPhone 3GS for $49, half the price is was just a week ago, matching AT&T's recent price drop.

While the hardware is 18 months old, the iPhone 3GS is fully updated to iOS 4.2.1 and runs it well. You'll miss out on FaceTime, the Retina Display, and the higher quality cameras for stills and video, but not much else. As a budget smartphone goes, it's killer. Still, $49 compared to a $199 iPhone 4 is peanuts when you compare the total cost with a 2 year contract. Oh, and this one won't run on Verizon...

Check out our complete 8GB iPhone 3GS review and let us know, up front savings make it compelling for you?

[Apple]

Though it got completely buried under the hype and hysteria of the iPhone 4 launch, Apple also released another "new" smartphone last week -- the $99 iPhone 3GS 8GB running iOS 4.

Sure it's "last year's model" in many ways, but a week ago it was still the best iPhone on the planet, holding up extremely well to much newer devices running other operating systems on other carriers. Now it packs iOS 4 punch with multitasking, folders, unified and threaded email, and all the other bells and whistles, and it's $99.

It makes absolutely no sense when you consider the costs of the accompanying voice and data plans under a 2-year contract run into the thousands of dollars, but getting below the magical $99 price point smashes a huge psychological barrier.

It also means Apple has something beyond competitive again in the budget $49-$149 smartphone space. For new entrants into the market wanting to upgrade from a feature phone (and quite possibly an iPod touch) to non-geeks of all kinds who just want a music, internet, and app phone, its going to be hugely appealing.

Since the iPhone 3GS shares the same basic design as iPhone 3G, accessory makers get a 3rd year on the market for their skins, cases, molded docks and chargers, and other accessories -- unprecedented in the modern smartphone space. More and more accessories will no doubt start targeting iPhone 4, just like a handful of apps are iPhone 4 only now, but a new iPhone 3GS owner will still find 225,000 apps and a mountain of gear available to them. Ad to that the integration into the rest of Apple's ecosystem, everything from iTunes media to Apple Store customer service, and appealing rapidly becomes compelling at the $99 price point.

And here's the one more thing -- unlike the iPhone 4 right now, it's available in many, many countries internationally, and unlocked in most of them outside the US. So, while a cheap, carrier subsidized iPhone 3GS is an option, so is a CAN$549.00, AUS$719, £419.00, €519.00 officially SIM-free, unlocked iPhone 3GS. It's an expensive option to be sure, but for those who hate contracts or love to travel, its cheaper than an iPhone 4 and around the same price as an unlocked Nexus One. That might also appeal to developers who want a second iOS phone but not the contract to go with it.

Apple launched two new smartphones last week and even though iPhone 4 sucked all the air out of the coverage, the $99 iPhone 3GS 8GB is just as important in its own right.

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Happy New Year and welcome to the iPhone blog's 2009 TiPb Editor's Choice Awards for the very best (in our opinion!) iPhone and iPod touch apps and accessories released in the last year!

Smartphone of the Year: iPhone 3GS (by default)

We're not really doing Smartphone of the Year since, unlike our sibling sites, Apple has so far seen fit to only release one new iPhone each year. However, that doesn't mean we don't think the iPhone 3GS isn't terrific. It is. Even if we consider the smartphone space as a whole, even if we put it up against the best Android, BlackBerry, Nokia, Palm, and Windows have to offer, while it might get bested -- even eclipsed -- in certain specs or feature sets, there's still nothing that brings it all together in so appealing a mainstream package as the iPhone 3GS.

From its butter-smooth interface now with "s as in speed" to its singular build quality to its incredible ecosystem to its 120,000 apps for anything and everything, even if we did do this category -- which we're not -- the iPhone 3GS would still be our pick for Smartphone of the Year. So there.

Competition of the Year: Palm Pre and webOS

Make no mistake, the Droid, the BlackBerry Bolds and Tour and Storms, the Nokia N900, the Windows Phone HTC HD2 -- each brought it in their own way (hey, it's why we do the Smartphone Round Robin), but each mostly brought it with hardware specs like 480p displays, or services like free navigation. They made good things better.

Palm brought it with a whole new OS, one that combined amazing visualization for multitasking with brilliant notification handling, and sidestepped the developer divide by using web technology as their SDK. If the iPhone woke up a complacent smartphone industry, Palm made sure they stayed awake another year. Sure the hardware could have been harder core and there was that whole iTunes sync brouhaha, but that combined with the "years in the desert" to go from PalmOS to webOS, made Palm even more of a comeback story, and who doesn't root for Rocky? That's why the Palm Pre is our competitor of the year!

Apple Innovation of the Year: $99 iPhone 3G

Last year Innovation of the Year was easy: the App Store. Now, two-billion downloads, well over 100,000 apps, and almost universal imitation not just from the Android Market, but now from BlackBerry App World, Microsoft Windows Marketplace for Mobile, Nokia Ovi Store, Palm webOS App Catalog, and who knows what else, it's still far and away the market leader, if the idea itself has long passed being led. Not that Apple didn't try in 2009, with the iPhone 3.0 Sneak Preview Event the undoubtedly innovative in-app purchases (including free apps no longer needing to stay free) and accessory access via the dock and Bluetooth. Push notification tops the candidates list as well. It isn't he full-on multitasking some still demand, but it covers 90% of the functionality at 20% of the battery drain (ahem) and hey, even some multitasking smartphones don't handle push notification yet.

But no, we're going with something more important even if less interesting. The $99 iPhone 3G. Sure, it's last year's model, but it's got the latest iPhone OS 3.x on it and most importantly it redefined -- and disrupted -- what was considered a budget smartphone and forced every other platform and player to lower prices and reconsider the -- frankly crappy -- handsets they offered for cheap. Up front cost shouldn't mean much to people on contract for $2000+ over two years but it does. Getting under $100 was huge for Apple. And for consumers, who's previous budget choices were the likes of Palm Centro, BlackBerry Pearl, or WinMo... whatever, it was huger still. That makes the $99 iPhone 3G our Apple Innovation of the Year.

App Store App Innovation of the Year: Augmented Reality

Last year Google Mobile snuck in some private-API wizardry (later made all nice and legal by iPhone 3.0) to make voice search so good we thought we were in Star Trek. This year Apple announced accessory access and all sorts of new API's and developers certainly didn't disappoint. Some of the most amazing new iPhone Apps weren't new to mobile, however. RedLaser reads barcodes and finds competitive prices amazingly well, but Android had that first. Likewise Qik is finally streaming live, but geeks were doing that from the N95 a couple years ago. Still, with everything from the latest Apple Remote to Zipcar, it's harder then ever to single one app out.

So we're singling out a category -- Augmented Reality. Take a live camera view, add location services and -- one day, visual recognition -- and layer data on top of it. Hold your iPhone camera up to a restaurant and the menu pops up for you to read. Point it west and see the tweets of the physically closest people you follow. Point it at your friend and get a reminder you owe him $5. We're not sure if it's just trendy concept or will really, truly prove functional one day, but just like Google Mobile made us think of Star Trek, this combines several cutting edge technologies in such a way that it makes us think of a dozen sci-fi heads-up displays and gorramit if we don't want that future today.

UI Gem of the Year: Tweetie 2 "Pull Down to Refresh"

Too small to be the overall innovation of the year, this category is for the tiny little tweaks that never the less make all the difference. Lots of developers continued to make drop-dead gorgeous iPhone apps in 2009, including Tapbots' latest Pastebot, Twitterrific 2's ability to hide so much functionality behind so sensible a layout, and Facebook 3.0 finally showed how to do massive social networking right on a local app, and Apple even rolled out new Voice Recorder and Compass app interfaces. It was something much simpler, however, much more insidious that got inside TiPb's user experience this year.

Yeah, it's totally Tweetie 2's terrific "pull down to refresh". Apple built the wonderful, tactile feeling elasticity of the "rubber band" effect into iPhone 1.x but never did much with it. Developer Atebits took it and made it a simple, intuitive way to request new data from an internet server -- in this case update your Twitter timeline. That many of us now try to use it to reload a page in Safari, or get new messages in Mail, or refresh anything and anything that feels like it should refresh when we pull down shows just how simple and intuitive it is. Sometimes it's not the big once-and-a-while's that make the difference, it's the little use-it-all-the-times.

Camera App of the Year: ReelDirector

iPhone 3GS brought a much improved camera and video recording, amazingly improved photo software, and even trim-able video recording. A lot of apps took advantage, both of the old gear and the new. Leanna covered five fantastic ones earlier, and since then a couple have even come around to offering video for the iPhone 3G.

But if video is the new still, ReelDirector ups the ante from Apple's trim to full-on (for a mobile) video editing. From titles to transitions, soundtracks to Ken Burns effects, it may not be Final Cut Pro but it's definitely a fun first cut.

Productivity App of the Year: Documents to Go Premium

Over two and half years in and some are still foolish enough to call the iPhone a toy. Unless, of course, they mean the iPhone can make even productivity work more fun than it has any right to be.

Documents to Go, which updated their flagship app to Premium and added PowerPoint editing and Gmail attachment support at almost the last minute gets our vote. Even though Apple still hasn't provided a universal document repository, or file picker (the way the picture picker works for images), Documents to Go continues to push the boundaries of what an Office-style app can do on the iPhone.

Social App of the Year: Twitter Clients

If Facebook had gotten push notifications, if Skype had actually gotten 3G access, this category might be even harder to decide than it already is. Likewise notification enabled IM clients such as BeeJive that now has group chat is a social powerhouse.

But those iPhone twitter clients just. won't. stop. We already mentioned Tweetie 2 and Twitterrific 2, but there's also Birdfeed, and both Twitbit and SimplyTweet made it into our staff picks of the year. And yeah, TweetDeck is on the iPhone now as well. In addition to the general-purpose clients, we have apps like Birdhouse that excel at writing and Reportage that make reading manageable. Heck, even Twitter's own WebApp got a great makeover.

Twitter exploded in 2009, and the quality of iPhone Twitter apps exploded right along with it. They're all so good, again we can't pick just one, so we're naming them all the social networking apps of the year!

Navigation App of the Year: Navigon Mobile Navigator

Another of app category made possible by iPhone 3.0 is turn-by-turn GPS navigation, and it didn't take long for top of the line, premium-priced market leaders like TomTom to come on board (and with car kits!), and subscription services like the TeleNav-powered AT&T Navigator have come on board, but low-cost, crowd-sourced alternatives have also flourished. And even with the 800lbs gorilla of the newly announced Google Maps Navigation staring them down all searchy and free, they've continued to update and innovate.

Navigon's MobileNavigator has been helping push the pace of those updates and that innovation. Whether it's text to speech or live-traffic, this maps-on-board solution took iPhone 3.0's APIs and didn't run -- it drove.

Action Game of the Year: N.O.V.A

If there was a theme to iPhone and iPod touch gaming in 2009 it was the maturing of the platform that brought both big franchises and games very much akin to the big franchises. There are literally too many to list (though Jeremy started and Chad focused in on FPS' a while back).

But N.O.V.A brought "Halo" to the iPhone. Maybe we should have found something more original, more uniquely dependent on the iPhone's specific technologies. But N.O.V.A brought "Halo" to the iPhone.

Racing Game of the Year: Real Racing

Given the accelerometer, racing games are just such a natural fit for the iPhone and iPod touch that it's no wonder there are so many great racing games for the platform (Chad's picked out a top 5 already!) And with iPhone 3GS and iPod touch G3 level horsepower and OpenGL 2.0 no doubt there's even better ahead (hey, we've seen a glimpse of it already).

For now, however, Real Racing is where it's at. Our 2009 Grand Prix winner is also a racing game of the year.

Puzzle Game of the Year: Ramp Champ

A lot of great puzzle games have hit the iPhone, from Peggle to Stoneloops to Bejeweled 2 and Tetris, to well almost every great puzzle game that could come to the platform. In 2008, however, Trism showed you could do an iPhone-proper puzzler and do it incredibly well.

Ramp Champ took a flick at it in 2009, with gorgeous graphics, one of the best implementations of in-app purchases to date, and arguably too much challenge for its (or rather its players) own good. There maybe puzzle games with bigger brands, more levels, and perhaps even better physics, but when we think about what we love most about iPhone software -- indie developers, attention to detail, love of UI -- Ramp Champ lands squarely in the bullseye.

Jailbreak App of the Year: ProSwitcher

Even post-iPhone 3.0, Jailbreak continued to fill gaps in functionality like theming, BT keyboards, lockscreen widgets, notification management, and -- of course -- unlocking the iPhone 3GS. If Apple won't do it, it's been proven time and time again the Jailbreak community will.

ProSwitcher did the same, but looked especially great doing it. Take a Jailbroken iPhone, add Backgrounder to get your multitask on, and then manage the whole thing with Safari Pages-style -- and yes, webOS cards-style UI candy.

Bluetooth Headset of the Year: Blueant Q1

Apple raised the stakes in 2009 by adding iPhone 3.0 support for A2DP stereo Bluetooth -- sort of. Apple forgot to add all the proper control protocols, so you can't skip tracks, but boy can you still rock out. Now iPhone and iPod touch users can enjoy music (and adjusting volume), and excellent products like the Motorola S9-HD and the Jabra Cruiser speakerphone.

And if that wasn't enough, our pick for BT headset of the year, the Blueant Q1 got an update -- really, how often to BT headsets get firmware update?! -- to enable A2DP. It's a premium product, just like the iPhone, but with voice control, and support for two phones (for you dual wielders), it's also a fantastic one.

Case of the Year: Otterbox Defender

Apple can't win. They change the design of the iPhone 3G and people with iPhone 2G cases complain their old accessories don't fit. They keep the iPhone 3GS in the same duds, and people complain it's boring. But at least the case makers could concentrate on better rather than different, and better they have. From the soft-stylings of the iSkin solo to the gloss of the Case-mate Barely There Chrome and the utility of the Golla bag, there's definitely a "case for that".

And if we're talking case, and we're talking protection, the Hummer of cases, the battle-armor of protection, is the OtterBox Defender. It's not for those who just want a sticker or a skin, a splash of color or the smell of fine leather -- it's for those who want their iPhone survive. And it's our case of the year.

EPIC FAIL of the Year: Capricious App Store Rejections

No doubt the App Store is such a smash hit that even Apple was unprepared for the tsunami of submissions they're now facing. The numbers are staggering, but not as staggering as the growth rate. But choosing to be a gatekeeper comes with it the responsibility of being a good gatekeeper. It's Apple's store and they can fill it's virtual shelves with what they want, but when the developers who make the apps those shelves are being filled with lose faith -- when they no longer trust Apple's rules, or realize there are no consistent rules being enforced, even if Apple and mainstream users don't lose out, the platform does. Sure, they've made some small improvements inside iTunes connect and with the RSS feed, but they're slow to the point of being arduous.

Some developers have been frustrated enough to leave the iPhone. A few returned only because the competitions' development environment, install base, and user experience wasn't competitive enough... yet. But that "yet" could change at any moment. And if the best and brightest developers are making the best and brightest apps for Android rather than the iPhone, that's not a loss to Apple's bottom line, it's a loss to their heart.

That's why rejected App Store apps, specifically the capricious, opaque way in which they're continuing to be rejected, is our epic FAIL of the year.

Story of the Year: iTablet

We've mentioned most of the other big stories already -- the still amazing Jailbreak journey, the still disappointing App Store rejections. And then there was the leave of absence, and triumphant return of Steve Jobs.

But iTablet/iStlate was the story that wouldn't quit, however, and the rumors, speculation, and rampant geek want built and built throughout 2009. We're not even sure actually announcing the device (which may just happen in 2010) could have been a bigger story -- anticipation is just that powerful. Whether (more likely when) it ultimate comes out, Apple's mysterious, mythical, magical, maybe iTablet is our story of the year.

Bring on 2010!

Well, that's it -- TiPb's Editor Awards for 2009 gone and done! What will we see in 2010? Who knows, but we're excited to find out!

Did you agree with any of our picks? Disagree? What would YOU have given the nod to? Feel strongly about it? Tell us -- or tell us off -- in the comments! (And we'll have our next Readers' Choice Awards coming up later in 2010 so you can put your apps where your opinions are as well!)

Happy New Year

--The iPhone blog team

Could an 8GB iPhone 3GS replace the 8GB iPhone 3G Apple currently offers as it's ahem bargain-basement smartphone? The $99 iPhone 3G was one of the big stories of 2009, set against otherwise anemic competition at that price point. An 8GB 3GS at $99 (or lower?) has been rumored before. Now Gizmodo says it could be immanent:

A user on the German apfeltalk forums ordered an 8GB iPhone 3G, and while the handset was what he was expecting, the packaging suggested it contained an 8GB version of the latest model, the 3GS. As you know, it's only available in 16GB and 32GB options, so either the box info contained a typo, or Apple accidentally got its new packaging mixed up with the old.

Sure, $99, $199, $299 makes little real difference when you factor in the thousands of voice and data dollars spent over a 2 or 3 year contract. Psychologically, however, walking in with almost no money in your pocket and walking out with an iPhone is huge to a mainstream customer base, and Apple could be planning to keep up the low price-point pressure in 2010.

Would you want?

There's a "budget" smartphone category that has so far revolved around devices like the Palm Centro, BlackBerry Pearl, and a host of Windows Mobile devices like the Samsung Jack -- basically scads of devices aimed below the fat wallets of enterprise.

Typically these devices are small to the point of being cramped, with tiny keyboards or work-arounds like T9 or SureType, and are low-margin for manufacturers -- sold more to grab new users, bolster market share, and create brand awareness than to serve as mobile computers for the internet age.

Well, Apple has just shot a cannonball through the heart of that smartphone category -- the iPhone 3G at $99.

At least that was our editor-in-chief, Dieter Bohn's reaction when we spoke following the big WWDC 2009 Keynote. And I think he's right. Here's why:

Come next week on AT&T (and Rogers and other carriers that match the price point), for $99 you'll be able to get a full-on 8GB iPhone 3G running iPhone 3.0 software.

That's not an iPhone nano or mini, not a stripped down, poorly built, cramped, barely functional budget smartphone, mind you, that's the same phone that until last Monday's WWDC Keynote was arguably one of the most advanced mobile computers on the planet. It's the lower storage version of the hardware that shipped over 10 million units and has 50,000 apps ready to run. Never mind Apple branding and a super-slick user experience.

For $99.

Whether or not the price point remains, or it lasts only as long as current supplies, this has to send Palm, RIM, HTC, and others into panic mode. Palm, for example, has show quarter after quarter losses on the Centro even in the budget category, and Apple will still be making margins on the iPhone 3G.

Will this put downward pricing pressure on next generation devices like the Centro-replacement, webOS-powered Palm Eos? Will it force RIM to offer BlackBerry Tour-like features at Pearl-sized prices? And even if they do, with multiple form-factors and networks at play, can they achieve the economies of scale and maintain realistic margins at that price point? For companies like Palm, whose financials are still shaky at best, these become critical questions.

Which brings us to the elephant in the budget smartphone room:

If Apple is selling the iPhone 3G at $99, what does that do to premium devices like the Palm Pre, BlackBerry Bold, HTC Touch Pro 2, etc.?

Certainly not everyone, but just as certainly some budget-conscious people who were considering a new premium smartphone might just decide to save themselves a hundred -- or several hundred -- dollars and get an iPhone 3G at $99 instead...