Despite the high upgrade costs, and the fact that much of the market for the iPhone 3G S is caught up in contracts for the iPhone 3G, one analyst expects Apple to sell 500,000 new iPhones this weekend.

Piper Jaffray analyst Gene Munster made the prediction that Apple will sell half a million of the new iPhone 3G S in the first weekend.

While the number may seem impressive, its half as many as Apple sold in the weekend of July 11, 2008, when the iPhone 3G launched. Over that weekend more than a million iPhone 3Gs were purchased.

However, Munster notes that during the first weekend of sales the iPhone 3G was available in 21 countries. The 3G S is launching in just eight countries this weekend.

On a positive note, CNN News reports, the 500,000 iPhone 3G S sales prediction is considerably higher than the 50,000 Palm Pres that it estimated that Palm sold in that device’s first two days of sales.