Wal-Mart to Sell iPhone 3GS for $97…Is it Worth It?

Wal-Mart will reportedly drop the price of the 16GB iPhone 3GS to just $97 starting today. That’s $102 in savings, but it might not be a smart buy since Apple’s expected to announce the next generation iPhone next month. While the $97 price tag might sound tempting, there are a few things shoppers should keep in mind before marching down to Wal-Mart to pick up a new iPhone.

According to a CNNMoney.com report, Wal-Mart is selling the iPhone 3GS for $97 to act as a price leader. While this is indeed the lowest price we’ve seen on the iPhone 3GS, this isn’t all that surprising. The iPhone 3GS simply isn’t worth $199 like it once was.

Both black and white 16GB iPhone 3GS are available at Wal-Mart retail stores for $97. The 32GB iPhone 3GS is still $297. Wal-Mart does not sell iPhones on its Web site.

The next generation iPhone, which is expected to be formally announced in June, has significant advantages over the iPhone 3GS. It has an all-new design, larger battery, forward-facing camera and speedier hardware. It is the first iPhone designed specifically for iPhone OS 4.0. Those who do purchase an iPhone 3GS can upgrade to iPhone OS 4.0, but may not be able to access all of the new operating system’s features.

In order to get the $97 deal on the iPhone 3GS, Wal-Mart shoppers will have to sign a two-year contract with AT&T. That’s pretty standard when you’re buying a new smartphone, but is $102 in savings really worth it? Sure, $102 is a nice chunk of change, but it’s small potatoes compared to the total cost of ownership of an iPhone. Add up how much you’ll spend on your AT&T service, iPhone applications, music, movies, earphones and cases over the next two years and you’ll see what I mean. Is $102 in savings really worth being locked into obsolete technology for the next two years if it represents only 5% of the total cost of ownership?

Is the iPhone 3GS a good enough phone? Yes, it’s what I carry and it’ll serve most people just fine. But the entire iPhone ecosystem is about to shift in the direction of the new model. New iPhone applications are going to be geared towards the capabilities of the new iPhone, not the iPhone 3GS.

The above image is from Apple.com today. As you can see, you can buy an 8GB iPhone 3G for $99. I wouldn’t be surprised if we saw the iPhone 3GS on Apple for $99 in the coming days.

The iPhone 3GS simply isn’t worth what it was when it went on sale a year ago.  The $97 price tag is likely to stick around long after Apple and AT&T clear out their current inventory. When the iPhone 3GS was introduced, the iPhone  3G began selling everywhere for $99. If you’re hell bent on buying an iPhone 3GS for $97, take a deep breath and wait until Apple formally announces the new iPhone and its pricing.

Don’t let the $97 price tag lead to an impulse buy. It’s a purchase many Wal-Mart shoppers will regret.