The $199 3G iPhone is only a rumor but it's not as far-fetched as you might think. The Apple iPhone may be the most hyped-up phone ever, which may be enough to get some folks to giving up their savings, but it came out in a market that is more competitive that it has ever been before. In fact, after the iPhone came out, manufacturers like Nokia, LG and Samsung redoubled their efforts to get more attractive handsets to compete with Apple's offering. So, AT&T may just be trying to get ahead of the market with an offer that is going to be as tempting as a free LG Viewty or a Nokia N95 8GB.
Update: No more rumors. The iPhone 3G is real.