RBC Capital Markets analyst Mike Abramsky issued a new research note outlining his expectations for Apple’s iPhone event tomorrow and Apple will reportedly keep its iPhone 3GS alive and offer it free with a service contract or $399 unsubsidized. It was reported that an 8GB iPhone 4 appeared in Apple’s inventory system and many believe it will be this device that Apple will offer for a low cost……………..

One analyst has said Apple will continue to sell its third-generation handset after the iPhone 5 is announced with offering it for free with a service contract or for $399 unsubsidized and analyst Mike Abramsky with RBC Capital Markets said he expects Apple to introduce a refreshed iPhone this week, likely to be branded either iPhone 5 or iPhone 4S. He doesn’t expect Apple to introduce a second, cheaper iPhone model, but instead reduce the prices of its existing lineup. He sees the iPhone 4 dropping to $99 subsidized, and $499 without a service contract and he also believes Apple will retain the iPhone 3GS in its lineup, offering it for free with a two-year carrier agreement, or $399 contract-free. That would be a change from years past, as Apple has traditionally discontinued its two-year-old iPhone model. With the release of the iPhone 4 in 2010, the iPhone 3GS was dropped to $99 with a contract and in January the price was further reduced to $49. Industry-watchers have been forecasting for Apple to introduce a new entry-level iPhone for years, allowing the company address a huge global prepaid wireless market, particularly in China. That led to speculation that Apple would release two iPhone models this year, one low-end offering and a full-fledged fifth-generation handset. But even prior to its note issued to investors on Monday, Abramsky has expressed skepticism about a new, low-cost iPhone from Apple. Back in August, the RBC analyst said the primary requirement for Apple to launch a low-end iPhone would be to provide an innovative, category-killer experience. The same analyst also said in June that Apple is expected to offer the iPhone 3GS for free once the iPhone 5 launches and he sees the approach helping Apple with mid-market buyers, and would counter the growth of Google’s Android platform.

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