Analyst Speculation on $99 iPhone and Higher Resolution iPhone 3G - Mac Rumors I don’t know why, but this seems on the face of it, to be just the kind of thing Apple might do. Drop the price of the current iPhone, then leverage the features of a faster-processor model (eg. video capability) into an updated model at the current price point.
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Analyst Speculation on $99 iPhone and Higher Resolution iPhone 3G - Mac Rumors

I don’t know why, but this seems on the face of it, to be just the kind of thing Apple might do. Drop the price of the current iPhone, then leverage the features of a faster-processor model (eg. video capability) into an updated model at the current price point.

Source: macrumors.com