http://www.maccomedy.com/wal-mart-to-sell-512mb-apple-iphone-for-12/

I do though believe that it’s simply nothing more than natural product line progression, that will force Apple to introduce new iPhones at competitive price-points with varying feature sets. It worked for the iPod, and it will work for the iPhone, it’s just a matter of time.

I’m quoting you on this Aviv —

“In order to sell a less-expensive iPhone, priced (let’s say) at $99, Apple would need to introduce a new model with less storage. The current models would get bumped in specs, and a cheaper iPhone would be introduced and outfitted with less storage than its bigger brothers. The current 8GB iPhone would have absolutely no place in this line up, and will probably be discontinued. At the same time, for Apple to increase or double the iPhone’s storage, they would need to either raise the price, or increase the iPod touch’s storage capacity as well, in order to avoid significant cannibalization, or confusion among consumers.

Theoretically, the iPhone family would have a diverse selection of products, just like the current iPod line-up. Perhaps not as many models or choices in color, but the storage capacity and features will be spread across the products, lowest to highest, priced accordingly. In what initially might seem to conflict, Friedman Billings Ramsey analyst Craig Berger has reported today that “Apple has cut its calendar Q4 iPhone production plans significantly more than originally estimated.” Chances are Apple is cutting production (on current iPhone models) to level out with industry demand. Although extremely difficult, the company must have the ability to foresee downturns in the industry, and mobile market. ”

From this article: http://www.macblogz.com/2008/11/03/32gb-iphone-3g-making-its-debut-at-macworld-2009/

All makes sense to me.