AT&T's 3G iPhone Is $199 This Summer

According to Fortune, AT&T's going to further subsidize the iPhone down as much as $200, making the final retail price a scant $199 with two-year-contract. The rumor is that the $200 bonus will only be available in AT&T stores, not in Apple stores, so people buying and exporting or using it with T-Mobile will be paying the higher price. Current first-gen iPhone users probably won't get this $200 subsidy when upgrading either, unless perhaps they renew for another 2 years.

If you're buying straight from Apple, it seems like their prices will still be $399 and $499 for the 8 and 16GB models. Fortune's source also says that the phone will have GPS and be 2.5mm thinner, not thicker as previously indicated. And you'll know when the new phone is coming—Apple will cut off shipments of the old phone in order to clear up inventory and give a subtle hint that you should wait before buying. [Fortune]

Update: It looks like Scott Moritz is the same guy who made predictions before that didn't come true. He comes from thestreet.com, who, via Jim Cramer, made the prediction that the iPhone would get 1.5 years of free service. The rumor sounds less credible to us now.