Along with the iPhone 4S unveiling in October, Apple also announced a new price for the iPhone 3GS; free with a two-year contract from AT&T. Smart move because this shows that Apple is taking on the lower-end Android handset market head-on.

Now, AT&T has raised the price of the iPhone 3GS smartphone to $0.99. Not a very smart move. One possible explanation for this decision comes from an AT&T employee, according to  MacRumors:

I work at AT&T, this is being done to help prevent fraud as the 99 cents cannot be billed to your bill. It must be charged to a credit or bank issued debt card. Fraudsters are using stolen identities to steal these handsets … been an issue since they went free.

In fact, the two-year old iPhone 3GS has been second-best selling smartphone in the U.S. during the third quarter of this year, behind only its successor, the iPhone 4. I don’t understand how this is possible if Android is “winning”. Also, it should be noted that the iPhone 3GS is available for $0 with a two year contract at Apple Stores, Wal Marts, Best Buys, Radio Shacks, Targets, etc.

Bottom line is that over four years after the original iPhone, AT&T is still stupid. I still don’t see the need for a price raise…