Rumor: AT&T to Offer $99 iPhone 3GS for Holidays

This is still in the early stages, but it’s possible we might see the iPhone 3GS, the latest version of Apple’s flagship phone, get a big price cut on the AT&T network pretty soon. A new rumor, confirmed from multiple sources, says the 8GB version of the iPhone 3GS will be selling for $99 before Christmas.

The rumor comes from BGR, which has an admirable record with product leaks and rumors that turn out to be true. And over at BGR they are saying this rumor has come from two separate sources. One of the BGR sources claims this is AT&T’s plan for combating all the hype surrounding the Motorola DROID that was just released on the Verizon network to much fanfare. The Motorola DROID is still $200 after rebate, so a $99 iPhone would handily undercut Verizon sales, but the companion phone, the DROID Eris from HTC, is selling for $99 so the iPhone could even compete with the low-end option.

Despite the need to combat DROID marketing, there’s another reason AT&T might be interested in a $99 iPhone 3GS. Verizon has been very vocal about offering the iPhone early next year when the AT&T exclusivity deal expires. If AT&T can entice a bunch of people into signing a contract for a $99 iPhone, then they won’t have to worry about losing as many customers to Verizon when they offer the iPhone. Of course, no amount of discount on the iPhone can make the AT&T 3G network more reliable, so people still might abandon ship and head for the Verizon isles.

Whatever their reasons for offering such a steep discount on the iPhone 3GS, one thing is for sure: If AT&T does make this offer, there are going to be a lot more lines than usual at Apple stores this season.

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