A lot of my friends have a iPhone 3 GS and they are happy with it and see no need to change. It's not the same with Android low-end models.
Please don't get me wrong I don't want to bash Android here but I want to make how smart this decision was / is. People are buying the old hardware ( which was awesome) and getting it with new the software for a good price.
Maybe I should also point out that people have also seen the same product last year and friends using it. Think about it. Would you buy a new phone which just came out as low-end model or would you buy the product from last year for a better price? Apple shows that the second choice wins.
Yes, iOS 4 was slow on the iPhone 3 hardware, I used that phone for years while waiting for an upgrade, but it was never worthless. It worked.
I can't believe that slipped though. It's a blot on the impression of the iPhone 4S as a solid thing.
I'm more or less dumbfounded at the popular perception of the iPhone 4 as a "great" industrial design. While it's definitely a great phone, if they don't return to a curved back with the next model or otherwise provide some tactile cues that help the user sense how it's oriented as it's being withdrawn from a pocket, it'll almost be enough to send me over the fence into the Android camp. Failing to move to a bigger screen will certainly do that.
Disclaimer: I have a iPhone 4.
Dropping the 'bumper' by itself also induces the rattle sound.
Other than that, I have not heard of any iphone4S rattle sounds. Does yours have a 'bumper' case on it?
In fact, I wouldn't be surprised at all if the 3GS processor is costing Apple more at this point than the 4 processor due to a larger die size and outside licensing fees. Paying more for a worse processor is something that you would never do if you just built a low end phone from scratch.
edit: For example, the Samsung Galaxy Nexus (http://www.amazon.com/Samsung-GT-i9250-Smartphone-Touchscree...) is $450, is running Android 4.0, has twice the Mhz, twice the storage, 3x the resolution and 1.6 times the camera megapixels, all for the same price.
The device worked as it is and it will work in the next year as it worked so why should we change it? No costs on this side to find. We can argue about costs and which of them would be higher but either way I think they choose the way which fits Apple best.
Apple wants to mess with new stuff and not with old already gone low-end model phones.
I don't know how non-tech-users see the nexus. I never seen one have it. I don't know why but it seem that the majority was bought by techies compared to a 3 GS which was bought from all kind of people including a lot of females which argue "I don't need the latest stuff".
See also Anandtech's writeup of the substantial new chip fabrication improvements going into this year's version of last year's iPad: http://www.anandtech.com/show/5789/the-ipad-24-review-32nm-a...
I'd say that overall the 3GS looks like a better deal.
Sure, pricing is confusing but that cuts both ways.
The needs of a high end consumer 3 years ago is different from the needs of a low end consumer today and different technologies age at different rates. The iPhone 3GS is still using a 65nm processor which means it's using almost twice as much silicon for the same number of transistors as an iPad 2, driving up cost. At the same time, features introduced into later phones like better cameras or the gyroscope would probably be worthwhile even in a low end phone.
Additionally, high end finishings like steel and glass might be attractive to a high end consumer but low end consumers would rather take the cost savings from using plastics.
At the same price point, the iPhone 3GS is not at all competitive hardware wise with modern low end phones. The only reasons they sell so well are because a) They grant exclusive access to the iOS ecosystem which trumps performance issues and b) the modern American way of pricing phones confuses most consumers. If the phones were priced at $649, $549 & $449, a lot more consumers wouldn't find a 30% discount for 2 year old technology that good a deal.