When it comes to Apple products, rumors are never too far away, constantly swirling around the Internet while sowing seeds of discord and confusion. Well, it is more or less confirmed that there will be a next generation iPhone coming your way (Apple won’t kill their goose which lays golden eggs, would they?), although speculation remains as to whether it will be known as the iPhone 4S or the iPhone 5. Still, an analyst believes that Apple might just sell the iPhone 3GS for free with contract when the next generation model comes around. If you decide to go off-contract, that might mean the smartphone would retail for around $350 to $400, while the iPhone 4 might see a drop to $100 – or $500 sans subsidies.

Might this move actually result in the 3GS being the budget iPhone? Even though the iPhone 3GS is said to be able to work with iOS 5, that does not mean all features of the updated operating system will be supported, so those who opt for the iPhone 3GS might end up being disappointed if they expect longer support from Apple in the future.

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