Image: Apple iPhone
Paul Sakuma  /  AP file
The iPhone 3GS, which came out last summer, is making way for a new model, likely to be announced next month. Wal-Mart says starting Tuesday, the 3GS will cost $97 — a drop of $100 —for a 16-gigabyte model and contract with AT&T.
updated 5/24/2010 8:05:07 PM ET 2010-05-25T00:05:07

Wal-Mart says it's cutting the price of the most up-to-date iPhone in half. That's another sign Apple is getting ready to unveil a new model.

Wal-Mart says that starting Tuesday the iPhone 3GS with 16 gigabytes of storage space will cost $97 with a two-year contract with AT&T. It currently costs $197.

Leaked prototypes for an updated iPhone surfaced on blogs recently. The price cut could signal retailers are clearing the shelves to make room for a new Apple smartphone.

Apple declined to comment on whether it's planning to release a new iPhone soon, or whether it will also sell the iPhone 3GS for less.

The company's annual developer conference kicks off June 7. Apple unveiled the iPhone 3GS at the same event last year. Apple CEO Steve Jobs will be the keynote speaker.

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