Rumor has it that the 3G iPhone, which should launch at WWDC 2008, will cost about $399 and have 8GB of memory. A 16GB version will cost $499 and a possible 32GB will cost $599 while a terabyte version, the size of a man’s fist, will cost $1 billion. I made up that last part.
They’re expecting an overhauled look and feel without changes to the UI or OS. There will be two parallel development platforms for Mac and iPhone/iPod which will nary overlap but use the same XCode IDE.