AT&T to offer 3G iPhones for as little as $199

The hotly anticipated second-gen iPhone may be considerably cheaper than its predecessor, according to a post on Fortune Magazine’s Techland blog. In the post, Fortune says AT&T will swallow $200 of the cost of the updated iPhone, bringing it down from an expected $399-499 to as little as $199. A couple of hundred bucks is still a lot to pay for a phone, but it’s nothing compared to the $599 Apple asked for the 8GB iPhone last summer.

Fortune’s blog post goes on to say the AT&T subsidy will be tied to a two-year contract and won’t be available to people who purchase the iPhone directly from Apple. Of course, buying an iPhone today already means a two-year lock-in with a $59.99-a-month (or more) AT&T contract, so little may change there.

Echoing a recent report by Engadget, Fortune adds that the next-generation iPhone will have 3G connectivity, a built-in GPS, and a slightly altered form factor compared to the original. Apple has yet to even confirm the device’s existence, let alone reveal a release date, but Fortune says a debut close to the iPhone’s June 27 launch anniversary is likely. Indeed, Walt Mossberg stated in early April that the 3G iPhone would come out in “60 days,” and Apple’s 2008 Worldwide Developers Conference is scheduled to take place from June 9 to June 13.

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