The $199 iPhone subsidized by AT&T is an old speculation.
And why not? Apple could well launch the 3G iPhone at $399 and keep the 2G iPhone 8GB at $199 with some AT&T subsidize. AT&T must be extremely happy with the high ARPU and high data usage of their iPhone customers. Now with a new 3G model for the high-end segment, why not keeping the 2G iPhone as a low-end model affordable by teenagers. Teenagers are THE early adopters of mobile apps. The kids will make a better use of iTunes, of Facebook access from Safari and of YouTube iPhone native client. This use will make happy to Apple, selling more songs, to AT&T selling more data usage and to the all the teenagers that dream of an iPhone but don’t have the 400 bucks. It is a win-win-win!
For Apple it means one more opportunity for dominance in a new segment. Apple would increase leverage to negotiate with telcos on revenue sharing, and would have a wider base to upsell iPhone applications and games downloads at $1.99 each, on top of the music tracks and videos at $0.99.
Maybe it is only a rumor, but it could well be another strategic move from Mr. Steve Jobs. You can picture the keynote: Now everybody can have an iPhone.