Recent reports by the folks at AT&T indicate the upcoming 3G iPhone could come with a new $199 price tag. Normally priced starting at $399, the touch phone and iPod combo released by Apple nearly a year ago has proven to be a major success. If Apple does indeed lower the phone’s price to $199, expect the device’s already high sales to explode.

Personally, I don’t see the price drop happening. Maybe a cut down version of the iPhone similar to the iPod nano will be released for $199, but why would Apple release something they can barely keep in stock at a $399 price point for half as much? Doing so would not only jeopardize sales for the less expensive iPod Touch and traditional iPod Classic, which start at $299 and $249 respectively, but how could Apple even meet the heavy demand that would likely result from such a price decrease?

[Seeking Alpha via Low End Mac]