AT&T has reportedly raised the price of subsidized Apple’s cheapest iPhone from free to $0.99. Apple has made its iPhone 3GS for free on the launch of iPhone 4S. Apple deals with its carrier partners to sell its iPhone 3GS for free with two-year contract. In October, while announcing the iPhone 4S Apple has clearly mentioned in the press releases that iPhone 3GS 8GB on carrier contract would be available for free.

After cutting all the price from subsidized iPhone 3GS, Apple and AT& reports in the Q3 earning reports that they are seeing the most tremendous demand for the iPhone 3GS in the U.S customers, even the device is old-generation. Behind the iPhone 3GS total price cut on carrier contract, Apple’s main target was to reach the poor people of the nation who not afford the high-end iPhone. AT&T CEO also mentions in his notes to investors that besides the iPhone 4S successful launch, the iPhone 3GS tremendous demand getting them a large number of customers around the nation and the demand of iPhone 3GS brings them newer subscriber than any other device available on their desk.

It’s not clear at the time, why AT&T rise the price of a fully free subsidized iPhone to $0.99, but still we think is affordable price for the Apple’s era rocking iPhone 3GS, which also supports that latest iOS updates and iMessages. iPhone 3GS only offered free for a month and a half on carrier contract, particularly given the fact that both Apple PR and AT&T Mobility’s CEO had specifically touted the free nature of the device. In response to a request for comment on the price increase, AT&T declined to offer a specific reason: