The More/real blog reporting that the iPhone 3GS is likely to be dropped after the upcoming Apple event on the 12th:
On the 12th, Apple will presumably start selling an iPhone 5 that would most likely take over the iPhone 4S’ position in the lineup. The 3GS will almost certainly be killed on the 12th. It was introduced in 2009, has been in service for three and a half years and has done it’s job well.
I disagree and think the iPhone 3GS will still be around. John Gruber speculates that it will continue life as a pre-paid option:
I wouldn’t count the 3GS out. I presume it will indeed lose its spot as the free-with-contract phone in the lineup, to be replaced by the iPhone 4, and the 4S will take over the $99-with-contract spot. But what about the low-cost prepaid market? If Apple wants to start taking market share in that market, my guess is they’d do with the 3GS.
There’s one other factor which seems to be overlooked and that’s iOS 6. Apple surprised everyone when they announced iOS 6 will be supported on the 3GS. (Even more surprising was that iOS 6 won’t be supported by the 1st generation iPad). The only reason I can think of that Apple would be wanting to push iOS 6 on to the 3GS is that they intend to keep selling it. We all remember the performance issues that the original iPhone 3G suffered when upgrading it to iOS 4. I’d hazard a guess that Apple spent additional time and resources slimming down iOS 6 enough that it can run on a 3GS so that they could keep it around.
If the iPhone 3GS indeed does stay on after the 12th, Apple will be taking a unique approach to budget smartphones. Unlike Android where “budget” usually means “outdated OS”, your budget Apple smartphone will run the same apps as the iPhone 4, the iPhone 4S or whatever the new iPhone will be called.