The news in the market is that Apple may lower prices on the iPhone and iPod touch in the next few months and drop the 8GB touch. Word is that falling flash prices coupled with the desire to introduce the 3G iPhone at an attractive price point will lead to the 16GB iPhone falling to $399, along with similar touch price drops: 16GB for $299 and 32GB for $399. It's not clear what'll happen to the 8GB iPhone, but everyone seems to agree that the 8GB touch is on the way out -- we actually think a $199 8GB touch would fly off shelves, but that's probably cutting margins razor-thin.

We'll see when we see and if flash prices are really falling that fast, it'll be interesting to see what happens to iPod nano pricing as well. Share your comments with us.

Source- http://www.engadget.com/2008/02/18/iphone-and-ipod-touch-to-get-100-price-drop-soon/