>What's more amazing is that Apple does this with one phone.

I think that's part of how Apple do it. Focus.

Well, now you have 3 distinct models out there, with significantly different hardware, so it's not really one phone.

Sure it is, its the same phone, but different model years.

That must be why they all have different names. But hey, at least that is better than "Macbook Pro (early 2009)".

I'm not sure if this is pedantic in context but actually Apple have been selling 3 or 4 phones for the last year. (The 3G was still available in some markets after the 4 was introduced just as the 3GS remains now in the US. Whether you count the Verizon iPhone seperately is debatable, but Samsung's American network exclusives seem to be counted that way, even if they share 99% of their make-up, though Apple has unified those now to some degree).

I'm thinking about picking up the 3GS here in Switzerland with a pretty cheap subscription plan, which is essentially a subsidized pay-as-you-go plan. (with a $20 subsidy over 2 years). So there definitely is a market for the older 3GS.