With the iPhone no longer exclusive to one carrier, the new competition with Verizon has pushed AT&T to launch a slew of strategic promotions to retain its customers. The latest bait is an iPhone 3GS for $49. They just unleashed a commercial for the offer, which should entice those late adopters on a budget.
The iPhone 3GS is getting close to two years old, but at a price tag that's $150 cheaper than a 16GB iPhone 4, it should open up a whole new demographic of iPhone users.
Rumors that Apple was planning on an iPhone nano to target lower end markets, should prove unlikely if huge price drops of older iPhone models becomes the pattern. Other than getting locked into a two-year contract, getting a full blown iPhone for under $50 should land the phone in many many new hands.