Originally Posted By: Dignan
If you're not out or nearing the end of your contract with AT&T, they will happily sell you a 32GB iPhone 3GS for $499...and re-extend your contract.

Thats because $499 is still a subsidized price. $699 is the base, no contract price of the 32GB model. The nice thing though is that AT&T did say anyone who was going to be eligible for an upgrade by as late as September can pick up the new iPhone at the normal $199/$299 prices. Also, AT&T seems to have a separate time frame for when a user can upgrade their phone vs the end of their service contract. If you have the higher per month plans, it's possible to get an upgrade every year instead of the normal 18 months.