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As an iPhone 3G owner, and one who normally lines up eagerly to drink from the Apple fountain, the iPhone 3G S announcement was a total yawner. A better camera, a compass, and the addition of video capabilities are nice, but there just doesn’t seem like much incremental improvement to hassle with an upgrade. I am sure Apple will sell many 3G S phones, but I think the real news is the $99 iPhone.

Apple is a company that knows how to sell quality. They have never postured to be a price leader, and it is seldom that price is their primary weapon. However, having a a new 3G S model gives this innovation company a good reason to offer the “old” model at $99 without compromising their brand premise. That’s half the price of the new Palm Pre, and it takes some of the enticement out of Blackberry’s current two-for-one offer. In addition, the old 3G is really a new iPhone when you pair it with the new 3.0 iPhone software that will be available in about 10 days.

Most of the business press seems to be gaga about the newest iPhone. However, the real story is that Apple is just as innovative as a marketing company as they are as a products company. The $99 iPhone 3G demonstrates that clearly.