By YOUNG MONEY Staff
29 June 2011

Apple may have started the current smartphone era, with the introduction of iPhone, but Google's Android has taken a substantial lead in the market since then. Apple Insider reports the company might have a way of recapturing some of its lost ground, with the introduction of the first free iPhone later this year.

Traditionally, Apple has debuting the new iteration of its iPhone at its annual developers' conference, but the company broke that tradition this year by instead introducing its iCloud service. Each time the company puts out a new iPhone, it has also phased out the model from two years prior, which would mean the end of the iPhone 3GS.

Instead, RBC Capital Markets analyst Mike Abramsky explained the company will likely continue production of the 3GS as a free model along with a new 2-year contract.

"While a $49 iPhone is already available (AT&T), psychologically a $0 iPhone provides a compelling offer," Abramsky told investors.

A survey from RBC found that interest in a free iPhone ranged around 14 percent compared to 13 percent when the iPad first came out and 9 percent when the original iPhone was introduced.

According to Apple Insider, analyst Charlie Wolf at Needham & Co noted that Android has already lost market share to the iPhone this year, falling back below 50 percent as the iPhone rose to around 30 percent.