In years past, most phone makers also developed a host of models aimed at the mid-tier of the traditional carrier market. Increasingly, though, that market is served by cutting the price of last year’s top-of-the-line model.

“The mid-tier is totally gone,” HTC President Jason Mackenzie said in an interview last week. “The new mid-tier device is last year’s hot model.”

The move has some long-term benefits for phone makers, who are have struggled to manage having a host of expensive products with a very brief life span.

However, the shift also means some short-term pain, particularly for all the companies that aren’t Apple or Samsung.

Eventually, Mackenzie said, the shift will benefit other companies, including his. But at the moment, HTC is struggling, as none of its models from last year have the same cachet as the iPhone or Samsung Galaxy S III.

Apple really kicked off this trend when it kept the iPhone 3GS in its lineup even after the introduction of the iPhone 4. Then, last year, the company introduced the iPhone 4S, and kept both the iPhone 3GS and iPhone 4 on store shelves, effectively expanding to new price segments without developing any additional products.

It will be interesting to see if Cupertino continues the trend by keeping around the iPhone 4 and iPhone 4S even as it announces its newest model on Wednesday. One indication that it might well do that is the fact that some carriers are just now getting the iPhone 4 and 4S.

This according to Piper Jaffray’s 23rd semiannual survey of 5,600 American teenagers, which finds continued, rising interest for the device in the high-school demographic. The percentage of teens who own an iPhone rose to 34 percent from 23 percent in fall 2011, and 17 percent in spring 2011. Meanwhile, the percentage of those who hope to own one rose from 38 percent and 37 percent during the same time periods. The likely driver of those increases: The cheaper iPhone 4 and 3GS.

Good news for Apple, since the teen demographic is a critical component of long-term growth and, as Piper Jaffray’s Gene Munster notes, “historically interest in buying an iPhone has correlated to future market share gains among teens.”

Not surprisingly, tablet interest in the teen market is also on the rise, with much of it focused on the iPad. Thirty-four percent of the teens Piper surveyed said they already own a tablet, up from 29 percent from fall 2011. Of those, 70 percent had iPads, 19 percent some model of Android tablet and 11 percent a Kindle Fire.

Among teens who don’t yet own tablets, 19 percent said they planned to buy one in the next six months, with 80 percent of that group saying they planned to buy an iPad. And though there was a 3 percent decline in respondents interested in purchasing tablets between fall 2011 and spring 2012, the fact that most of them are leaning toward the iPad reveals a clear trend here. So again, good news for Apple, as Munster notes.

“We expect Apple to remain popular with younger users, which we believe could help establish a continually growing base of loyal users,” said Munster. “We believe that as Apple continues to discount prior model iPads (i.e. iPad 2 to $399) and eventually releases a smaller screen, lower priced iPad, iPad ownership will continue to rise.”

Though Apple declined to break down iPhone sales by model when it reported first-quarter earnings earlier this week, a recent consumer survey by Consumer Intelligence Research Partners (CIRP) does just that. And it finds the iPhone 4S to be the most popular model of the device, by far.

According to CIRP’s survey, iPhone sales in the U.S. have favored the 4S above all other models since the device’s Oct. 14 launch in 2011, despite some new and compelling pricing for the iPhone 4 and 3GS. The research house found the 4S to account for 89 percent of iPhone sales since its debut, while the iPhone 4 and 3GS accounted for 7 percent and 4 percent, respectively.

Interestingly, the higher-end 4S models sold particularly well. Of that 89 percent figure, 21 percent were 64 gigabyte models, 34 percent were 32GB, and 45 percent were 16GB. So, while a lot of folks have been willing to spring for the $199 16GB 4S, an impressive number have been willing to cough up the $399 for the 64GB.

“Clearly, the iPhone 4S sold very well,” CIRP co-founder Mike Levin told AllThingsD, before adding some additional color to the metrics above. “An amazing 19 percent of all iPhone buyers upgraded from the iPhone 4, a phone barely a year old at the time of the launch. Forty-two percent of iPhone buyers broke existing carrier contracts to get the new iPhone 4S. And 19 percent of these iPhone 4S buyers sold their old iPhone in the secondary market. Early upgrades, broken contracts, and selling used phones — all allow buyers to purchase the new iPhone 4S, when conventional wisdom suggests that these users would follow the two-year contract cycle, or at least purchase the cheaper models.”

But those are side notes, really. The most important takeaway from CIRP’s research is that Apple is selling mostly iPhone 4Ss. And with an estimated bill of materials between $170 to $220, the manufacturing margins on the 4S are huge — roughly 71 percent to 73 percent.

Little wonder why the company’s latest quarter was such a monster.

According to NPD, the iPhone 4 and 3GS continued to hold the top two positions in U.S. smartphone sales during the third quarter, despite the ever-lengthening conga line of Android handsets parading to market these days.

1. Apple iPhone 4
2. Apple iPhone 3GS
3. HTC EVO 4G
4. Motorola Droid 3
5. Samsung Intensity II

 
Not included in NPD’s rankings is the new iPhone 4S, which arrived at market in mid-October and has been setting sales records ever since. Given that, will Apple sweep the top three spots in U.S. smartphone sales in the fourth quarter? Certainly seems possible.

Short answer: Lots.

Piper Jaffray analyst Gene Munster estimates that 18.8 million iPhone 3GS users will likely upgrade to the iPhone 4S, accounting for about 18 percent of Apple’s fiscal 2012 iPhone sales.

“We believe the number of iPhone 3GS units sold before the launch of the iPhone 4 serves as a conservative proxy for iPhone users that will likely upgrade to the iPhone 4S,” says Munster. “Note that our Aug-11 survey shows that among existing iPhone users, 94 percent expect to buy another iPhone as their next phone; Apple has built an annuity of smartphone buyers.”

Indeed. And Munster’s estimate includes only 3GS upgraders. It doesn’t account for existing users of the original iPhone, iPhone 3G, or even the iPhone 4. In other words, it’s likely that upgrade sales will be even greater than Munster predicts.

We’ll see. Currently, Munster is calling for 25 million iPhone units to be shipped in calendar Q4 of this year, a number he has already conceded may be too low.

For its part, AT&T can highlight the fact that the iPhone 4S runs on its faster HSPA+ network, and that owners can talk and surf at the same time. Also, it will be the only U.S. carrier offering the iPhone 3GS, which will now be free with a new two-year contract.

“We feel like the new phone, when it runs on our 4G network, is going to download material twice as fast,” AT&T Mobility President Ralph de la Vega told AllThingsD in an interview on Tuesday. “When you combine that with a new portfolio that includes the iPhone 3GS, the iPhone 4 and the iPhone 4S, I think we have the best iPhone portfolio in the industry.”

The company also hopes to convince subscribers to stick with AT&T by introducing a new “upgrader” app that will let eligible customers order a new iPhone from their current device.

Verizon, meanwhile, continues to pitch the quality of its network as its chief selling point.

“The network matters,” chief marketing officer Marni Walden said in a statement. “And, while iPhone 4S may look like the same device across all carriers, customers know they are choosing reliability when they select a Verizon Wireless iPhone 4S.”

The big news for Sprint, of course, is the fact that it is finally getting the iPhone after a wait of several years. In addition, Sprint remains the lone iPhone carrier offering unlimited data plans to new smartphone subscribers, something that is expected to continue even with the iPhone joining its lineup. Both AT&T and Verizon initially offered unlimited data to iPhone customers, but later moved to tiered data pricing.

Sprint declined to talk in any detail about its iPhone plans, saying only that it was “delighted to be part” of the iPhone announcement and would have more information soon.

“Today is all about the new products being announced by our partners at Apple,” a Sprint representative said on Tuesday.

Although it wasn’t highlighted on stage, Sprint is also getting the $99 iPhone 4, in addition to the new iPhone 4S.

None of the major carriers went into detail on their rate plans and other particulars on Tuesday, though all are expected to do so this week, with preorders for the device slated to start on Friday. The iPhone 4S is scheduled to start shipping — and to hit stores (at least until they sell out) — on Oct. 12.

Left out in the cold, as expected, is T-Mobile USA. As is the case with the iPhone 4, not only does the carrier not have a deal with Apple to sell the device directly, but the GSM version of the phone doesn’t support T-Mobile’s 3G or 4G networks. Even with that condition, T-Mobile noted earlier this year that it has more than one million iPhones running on its network today.

Apple does plan to offer an unlocked version of the iPhone 4S, but it has yet to announce pricing and, for technical reasons, it is really more suited to AT&T customers that travel a lot internationally than it is to switching between CDMA and GSM networks.

The fact that a single iPhone 4S model works across Sprint, Verizon and AT&T does open up some interesting possibilities for when a customer is at the end of their two-year contract. In theory, it could be simple to move that phone to another carrier, though it remains to be seen what roadblocks, if any, will emerge.

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Meanwhile, Apple plans to continue selling an eight gigabyte iPhone 4 for $99 — and an 8GB iPhone 3GS for free — with new contracts. Also, the iPhone 4S will be coming to Sprint, meaning Android models will no longer have the run of their stores; this leaves T-Mobile USA as the only national carrier without an iPhone.

With a new two-year contract, a 16GB iPhone 4S will sell for $199, while the 32GB version will sell for $299 and the 64GB model for $399. Preorders start on Friday, and the new phone will be available Oct. 14 in the U.S., Canada, Australia, the United Kingdom, France, Germany and Japan.

Apple is also adding a second major carrier — KDDI — in Japan, in addition to longtime partner SoftBank.

More than 70 countries will be supported by the end of the year, Apple Senior VP Phil Schiller said, making it the fastest iPhone rollout in the company’s history.

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The deal is valid in-store only at Best Buy and Best Buy Mobile.

The market still loves last year’s iPhone.

Despite a later-than-usual refresh, the device continues to sell well, as recent numbers from carrier partners AT&T and Verizon show.

Reporting earnings for its June quarter last Thursday, AT&T said it activated 3.6 million iPhones, more than the 3.2 million it activated during the same period last year. Meanwhile, Verizon activated 2.3 million in its second quarter. Together, the two carriers activated 11.7 million in the first half of 2011, which is just 3.5 million shy of AT&T’s total iPhone activations for all of 2010.

Not bad for a smartphone that’s been on the market for a year now, a lifetime in the industry (side note: The iPhone 3GS is still pulling in decent sales at AT&T and it’s two years old). According to Morgan Keegan analyst Tavis McCourt, iPhone sell-through was 118 percent year over year this quarter in the States and abroad as well. And with the next iteration of the device expected this fall, sales will likely surge even more.

“The iPhone is broadly gaining share in a rather dramatic fashion,” says McCourt. “This is a product that is 12 months old. Pretty impressive.”

But hardly surprising. As the chart below demonstrates, the iPhone’s sales trend since it first debuted in 2007 has been quite dramatic — from 11.6 million in fiscal 2008 to 55.2 million in the first nine months of fiscal 2011.

Canaccord Genuity analyst Michael Walkley says his retail checks show continued strong demand for the iPhone 3GS at AT&T and iPad 1 at Verizon, even as the iPhone 4 and iPad 2 continue to fly off the shelves. At AT&T, for example, the iPhone 3GS is outselling newer Android phones like the HTC Inspire and Motorola Atrix.

Says Walkley, “At AT&T, our checks indicated new Android smartphones primarily gained share from Windows 7 smartphones but not from the iPhone. Our checks indicated modest share gains for the HTC Inspire, but the Inspire gained share from the Windows phone 7 smartphones and the Motorola Atrix. As such, the iPhone 4 remained by far the best selling smartphone at AT&T and the 3GS remained a strong selling smartphone due to its $49 price.”

Not bad for a last-generation smartphone.

Of course, at $49 the 3Gs is half the price of the Inspire and a quarter of the price of the Atrix, so cost is obviously a big factor here. Still, the continued success of Apple’s older devices in the marketplace suggests that the company, which is already winning at the market’s higher end, has a good shot of winning at its lower end as well–particularly if it ever releases a lower-tier iPhone-–one free of the required $70+ a month voice-and-data service plan.

According to NPD, Apple leapfrogged both HTC and Motorola to move into the No. 3 spot with 14 percent of the overall phone market, boosted by the arrival of the iPhone on Verizon. Samsung still tops the U.S. market with 23 percent, followed by LG at 18 percent.

“Apple and Verizon had a very successful launch of the iPhone 4, which allowed the iPhone to expand its market share that was previously held back by its prolonged carrier exclusivity with AT&T,” said Ross Rubin, executive director of industry analysis at NPD, in a statement. “While some of that growth came at the expense of Android operating system, Android models still accounted for half of all smartphones sold in the quarter.”

However, Android’s share of the smartphone market dipped in the quarter, NPD said, to 50 percent in the first quarter from 53 percent in last year’s fourth quarter. Apple’s iOS rose nine percentage points, accounting for 28 percent of smartphone units sold, while BlackBerry lost five points of market share, falling to 14 percent.

For the first time, smartphones overall accounted for more than half of all phones sold in the U.S., with consumers opting for a smartphone 54 percent of the time. That lead to a 2 percent rise in the average selling price of phones, to $102. The trend of more smartphones at lower average prices should continue, Rubin said.

“We’ve started to increasingly see lower-priced handsets come in, both at the major carriers and at some of the regional carriers as well,” Rubin said in a telephone interview. Rubin noted that consumers are starting to move to Android at carriers that cater to the more price-sensitive segments of the market, including carriers such as Cricket, Sprint’s Boost Mobile brand and Metro PCS.

“Despite the higher fees, consumers are adopting those handsets, as they are important to stay in touch with the rest of the world,” Rubin said.

The iPhone 4 was the top individual phone model, followed by the iPhone 3GS, Motorola Droid X, HTC EVO 4G, and HTC Droid Incredible. Overall for the quarter, smartphone sales grew 8 percent from the fourth quarter, but total phone sells fell 1 percent.

That is a slower start than either Android or Palm’s webOS had in their debut, NPD said. Windows Phone 7′s sales put it not only behind Android, Apple and RIM, but also behind its own, older Windows Mobile operating system. Windows Phone 7′s two percent share was roughly equal to what HP’s Palm share was for the fourth quarter.

“With its mid-quarter launch, Windows Phone 7 entered the epicenter of competition between iOS and Android at AT&T,” NPD analyst Ross Rubin said in a statement. “Both competitors offer mature feature sets and large app libraries. Microsoft has made the case for Windows Phone 7′s differentiation and improved integration. Now, the company must close the feature gap, offer more exclusive capabilities, work with partners to deliver hardware with better differentiation, and leverage its extensive experience in driving developer communities to increase its app offerings.”

Microsoft has said some two million phones running Windows Phone 7 were sold to carriers worldwide, but has offered no data on the rate at which the devices were actually leaving store shelves.

AT&T, which sells the broadest array of Windows Phone 7 models, also hasn’t given specific sales figures but said that the numbers have been growing steadily since launch. LG, one of the phone makers that built Windows 7 models, indicated its sales were less than it had hoped.

Microsoft downplayed the meaningfulness of early sales figures.

“Sales are an important measure of success, but for a new platform customer satisfaction and active developer investment can be even more important leading indicators of long-term success,” a representative said in a statement, reiterating comments that the company made last week noting high customer satisfaction numbers and a growing base of applications. “These early signs of satisfaction from customers and developers are reason to be bullish about the foundation for long-term success for Windows Phone 7.”

Overall, NPD said that Android grew its share nine points during the quarter, grabbing 53 percent of the consumer market, while Apple iPhones accounted for 19 percent of the market, down four percentage points. RIM also had a 19 percent share, a drop of two percentage points.

The five top-selling handsets included three Android models and two versions of the iPhone–the iPhone 4 and iPhone 3GS. The iPhone 4 was the top-selling device, followed by the Motorola Droid X and HTC Evo 4G. The iPhone 3GS was the fourth-best-selling model, followed by the Motorola Droid 2. Motorola has already said it expects to take a hit this quarter, as its top-selling devices are on Verizon, which is now getting an iPhone of its own.

“The improvement of iPad 2′s display focuses on thickness and anti-reflection, not resolution,” Ming-Chi claims, adding that the device’s display module is 30 to 35 percent thinner than that of the iPad 1 and will eliminate some of the glare that some critics claim makes it difficult to read in bright sunlight.

Or, rather, how has it been responding? Because it’s clear the company has been preparing for this moment for some time. Last year, it accelerated upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it. And it locked them all into two-year contracts in the process. And then, last week, it drastically reduced the price of the iPhone 3GS, halving it to $49 from $99.

Presumably, AT&T could follow this with additional pricing promotions that could further limit iPhone subscriber defections to Verizon, though at this point one could argue that it’s as well prepared for its loss of iPhone exclusivity as it will ever be.

Why? Two big reasons:

1. According to Piper Jaffray analyst Christopher Larsen, nearly 80 percent of AT&T iPhone users are currently on family or corporate plans, which makes switching to a new carrier a difficult proposition.
2. Approximately 75 percent of them still have at least a year left on their contracts.

And there’s a third wild-card reason as well: How Verizon’s network fares after a big influx of data-heavy iPhone subscribers. That’s tough to predict, but two analysts I’ve spoken with said they expect Verizon to suffer some network growing pains, though not as bad as the ones suffered by AT&T. Ultimately, Verizon is starting off with a better network, and CDMA is said to be a more spectrally efficient standard than UMTS.

So will there be some AT&T subscribers who switch to Verizon when it begins selling the iPhone? Certainly. But they may not be nearly as large in number as you might think.

“AT&T has done everything it can,” Needham and Co. analyst Charlie Wolf told me this morning. “The company locked in a lot of iPhone owners by waiving early termination fees last summer. It’s moved aggressively to add a bunch of BlackBerrys and Android phones. And it should be remembered that AT&T will continue to sell the iPhone. So I doubt that the loss of subscribers to Verizon will be that large. But it could be material as it pertains to the bragging rights between AT&T and Verizon. “

PREVIOUSLY:

• Why Verizon’s iPhone Won’t Be So Bad for RIM
• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

Quite a change from last year and the launch of the iPhone 3G and 3GS, when it took a little over a month for China Unicom to hit the 100,000-units-sold milestone

Said Li Gang, senior vice-president of China Unicom “The sales of previous versions of iPhones created a solid foundation for the explosive performance of the iPhone 4 this year.”

[Image credit: Frank Yu / Flickr]

Another coup for China Unicom, the only Chinese carrier distributing the iPhone so far. Earlier this month it began selling a Wi-Fi-enabled iPhone 3GS after regulators approved the model for sale in July.

Years before the iPhone officially hit the Chinese market, Apple fans purchased them from grey-market sellers. Some go overseas themselves to bring the devices back, and can pay just a little more than $10 to have them unlocked. Users without the necessary dual-currency credit cards have purchased iTunes gift cards at discounts online in order to buy iPhone apps, and enabled third-generation data services on their grey-market iPads by physically cutting SIM cards in half to fit the tablet’s smaller card slots.

Now, as Apple prepares the official launch of the iPhone 3GS with Wi-Fi, considered yesterday’s news in most other markets, a Chinese company called Yosion Technology is offering Chinese Apple fans another option.

Shenzhen-based Yosion has unveiled a product called the Apple Peel 520, a hack which can turn any iPod Touch into a cell phone. The Apple Peel attaches to an iPod Touch like any protective case, but functions as a dock, an extended battery and most intriguingly, a SIM card slot.

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