The iPhone 3GS is still selling in huge numbers according to President and CEO of AT&T Mobility, Ralph de la Vega. Speaking on a conference call for analysts, he discussed the impact of the recent price reductions on the iPhone 4 8GB model and more importantly the now free iPhone 3GS.

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.

AT&T has also reported slower numbers this quarter which it is putting down to the launch of the iPhone 4S in the third quarter. AT&T expects that to change dramatically in the holiday quarter with huge sales of the iPhone 4S.

Source: MacRumors