iPhone 3GS algebra

How many of the iPhone 3GS did Apple sell at discounted prices in parallel to the iPhone 4? In other words, how pressing is the need for a genuinely new cheaper model - an iPhone Nano, so to speak?

Well, the fact that the iPhone ASP is $650 should give us a hint, but we can go deeper. During the 4S launch event last week, Tim Cook said that ‘over half’ of iPhones sold have been the iPhone 4.

The iPhone 4 went on sale in the last week of the June 2010 quarter. Sales from the September 2010 quarter to the June 2011 quarter were 69.33m. If we assume that 1m of the 8.4m iPhone sales in the June 2010 quarter were after the iPhone 4 launched, that gets us to total iPhone sales after the iPhone 4 launched of 70.33m.

70.33m is 54.5% of 128.96m total iPhone sales.

In other words, 54.5% of iPhone sales have been made since the iPhone 4 launched and the 3GS price cut began, ‘over half’ of iPhone sales were the iPhone 4 - and therefore 3GS cut-price sales were somewhere between 0% and 4.5% of the total.

4.5% of the total would be 5.85m units, or 8% of iPhone unit sales since the 4 went on sale. In the same period, somewhere around 110m Android phones were sold at an average of perhaps $350.

Of course, Tim Cook might have been using the (not yet released) September sales figures. We’ll see. But either way, selling old models at a lower price seems to be an incomplete approach to the issue.