The rumor mill has been working overtime lately and, unsurprisingly, the subject is Apple’s iPhone. Not the old, dusty iPhone but the new, shiny, thinner (by 2.5mm), sexier, CHEAPER, 3g iPhone.

Did I say cheaper? Yes I did. AT&T are allegedly planning to discount the handset by a massive $200 in return for new customers signing a two year deal with them. Subsidies such as this are fairly common in the industry but one of this size is fairly unprecedented. The prices paid for calls and data by customers of the 3g iPhone are likely to be fairly high – some estimates put the figure at around $100 per month per 3g iPhone customer – so AT&T will make the money back fairly quickly. Of course it will put software locks in place so that new customers cannot take their shiny new 3g iPhone to a new provider.

Apple’s marketing team are at it again, and now Apple and iPhone fans worldwide are chomping at the bit in anticipation of the release.