AT&T to Sell 3G iPhone for As Low as $199 in U.S.

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Apple and AT&T will cut $200 off the price of the iPhone 3G when it arrives this summer. The phones should hit at $399 and $499 for 8 and 16-gigabyte versions and the subsidy should drop the price to as low as $199.

Fortune has also pseudo-confirmed a GPS chip inside the new phone.

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