Analysts are pointing to a possible cost subsidy for the next version of the iPhone, which would seriously cut costs to the consumer. This is how most phones work, because the carrier makes money on the service plan.
They are pointing to a magic number of $200 for a 3G iPhone when users sign up or renew a 2-year contract. This reduction in cost would potentially bring in so many new customers that are put off by the iPhone's price to AT&T.
Since they would all be on a 2-year contract, AT&T makes a lot of money in the long run.
Will you get an iPhone if it's 3G and $200? Will you upgrade your existing iPhone for $200? I would.