O2 is likely to cut prices of the 8GB and 16GB Apple iPhone 3G in the next few weeks ahead of June or July, which could see the release of the much-awaited 2009 edition of the iPhone.
The iPhone 3G is currently available in its 8GB for free on the £44.05 tariff and above while the 16GB is free only on the £73.41 monthly contract.
Mobile Today reports that the 8GB version will be free on £35 contract while those spending £45 or more will get the 16GB version instead.
Last year, O2 shaved £100 off the price of the first generation iPhone shortly before the 3G version was launched and currently the iPhone can be had for between £59 and £159 depending on the contract purchased.
The reason for the "price cuts" (though strictly speaking, it isn't) has to do with the fact that the 30-day window will allow O2 to clear its stock of second generation iPhone ahead of the launch of iPhone v3.0.
It is not yet known whether the price of the PAYG version of the iPhone 3G, which stands at £342, will also be slashed in the price cutting exercise.
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Mobile Today also said that Apple could potentially release a mid-range iPhone Nano which will be cheaper, an implicit acknowledgement that even Apple customers do not have limitless spending capabilities. But Apple will have to make concessions when it comes to the amount of memory and possibly the iPhone's screen size.