iPhone News Updated

AT&T Raises Price of IPhone 3GS to $1

AT&T Raises Price of IPhone 3GS to $1

AT&T will no longer offer the iPhone 3GS free with a two-year contract, charging a nominal fee of $1 for the device instead, a move that may possibly prevent fraud.

The Dallas, Texas-based carrier did not give a reason for the decision to raise the price of the 3GS, but the company maintains the device is still available for a bargain.

“IPhone 3GS is still available at an incredibly low price and we’re confident consumers will agree that this remains one of the best deals for a leading smartphone,” AT&T said.

Raising the price of the 3GS to a $1 may take away AT&T’s opportunity to market itself as the only carrier that offers a free iPhone, but it’s still the only one that offers the 3GS. Apple’s third-generation smartphone has proven to still have some impressive selling power, and no other carrier in the U.S. offers the device, leaving AT&T with no competition for those customers on a budget interested in an iPhone.

The price increase will bring some extra revenue to AT&T, but analysts don’t believe the difference is enough to warrant a price increase on a phone the carrier had already decided to offer for free.

A post on the MacRumors forums, from a person claiming to be an employee of AT&T, offers another theory on the price hike. The user said the move was made to prevent fraudulent customers from taking advantage of the offer. Putting a price tag on the device requires buyers signing up for a contract to have their credit card charged in-store and prevents customers who are using stolen identities from being able to steal the devices.

The 3GS is a likely target for fraudulent buyers because the device still commands a high price on the open market. The smartphone sells for nearly $400 on websites like eBay and Craigslist, providing a big payout for people looking to cheat the system.

Apple has been the target of phony buyers in the past because of their products’ high resale value. Earlier this year, dozens were arrested after a crime ring managed to purchase $1 million worth of merchandise from the company’s stores.

Regardless of the reason for AT&T’s change, the carrier’s sales shouldn’t be affected as a result, and the company can still say it offers the iPhone at the cheapest price.

[Thanks: http://www.mobiledia.com]

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