AT&T Gambit Cuts Price of Older iPhone to $50

NEW YORK (TheStreet) -- Yes, we've all heard the news: The Apple (AAPL) iPhone 4 will also be available on Verizon (VZ) Feb. 10. But, rest assured, original iPhone provider AT&T (T) is not standing idly by. In early January, the phone giant announced a series of pricing cuts that, when matched with some new network options, make the iPhone -- albeit an older model -- devilishly attractive for smaller firms.

I have been giving the new, repriced "classic" iPhone the small-business sniff test for the past few weeks. And there is a lot for smaller firms, particularly those who use Apple gear, to like.

iPhone
AT&T is offering a $50 iPhone 3GS, which continues to perform well for document editing, email, apps and light music and media usage.

What you get
The older, lower-cost 8GB, iPhone 3GS ($49 with plan) really is a good way to get this uber-hip device into your shop.

AT&T knows exactly what it is doing here by dropping the price for the phone in half. While not a full-fledged iPhone 4, the unit is surprisingly efficient for basic business tasks. Most mobile email clients are supported, Safari runs perfectly well and most Apple software and features work just fine. And despite the bad buzz that Apple's latest iOS 4 runs poorly on the older iPhones, if you use some self-discipline -- as in, don't run too many applications at once -- the unit can perform perfectly well for document editing, email, apps and even some light music and media usage.

But what really sells the unit to small business is the new network access plans. There are several options, but the most intriguing for small firms is the $25 per month, 2GB-a-month plan that also supports Wi-Fi access to AT&T's not-hideous national hotspot network. Package all that with a midlevel voice and text plan and monthly pricing comes in at about $100 a month. So suddenly a team of three can get all tooled up the Apple way for less than $500.

That is not bad.

What you don't get
As nice as it is, this iPhone 3GS is not even close to the iPhone 4 in terms of performance and app support. And remember, you are buying what amounts to legacy technology.

As intriguing as it sounds to nickel and dime your way to an iPhone, there are compromises. This is an older model, with slower performance and fewer features. You are not going to get the rich media experience of the iPhone 4, nor will you have access to the coming fast wireless network technologies called 4G that are the future of the cell phone industry. Also keep in mind, $50 is a lot of money for a business smartphone right now. There are many perfectly good BlackBerrys ( RIMM) and Palms ( H-P) that are flat-out free with service plans.

Make sure you do your due diligence and understand what you're buying.

Bottom line
Is the newly cheap iPhone 3GS the ultimate Apple solution? Of course not. But for many smaller Apple-based businesses, a low-cost iPhone is not a bad way to get this easy-to-use unit into the hands of you or your employees.

And there is one other tantalizing nugget: The iPhone 3GS has performed better as a basic voice telephone in some tests then the iPhone 4. For sure performance will vary, but I would not be surprised if your brand-spanking-new "old" iPhone 3GS gives you better voice service than a brand-spanking-new "new" iPhone 4.

>To submit a news tip, email: tips@thestreet.com.

RELATED STORIES:



Follow TheStreet.com on Twitter and become a fan on Facebook.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

More from Investing

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

At End of May, Investors Signalling They May Stay Away

At End of May, Investors Signalling They May Stay Away

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever