8GB iPhone 3GS in Time for Christmas

Apple's own Phil Schiller said that the company's holiday product lineup is set for this year, but that's not stopping the rumor mill from claiming that an 8GB version of the iPhone 3GS is still on the way. No less that two unnamed sources are saying that AT&T will begin selling an 8GB iPhone 3GS for US$99 before Christmas, according to Boy Genius Report.

Apparently one of the phantom sources said that introducing a sub $100 iPhone 3GS is a move to compete with the new Droid smartphone launches.

Apple currently offers 16GB and 32GB versions of the iPhone 3GS priced at $199 and $299, and an 8GB iPhone 3G priced at $99. The iPhone 3G includes a still camera instead of a video camera, doesn't have a built-in digital compass, and can't take advantage of the iPhone 3GS Voice Control features.

Replacing the 8GB iPhone 3G with an iPhone 3GS version would make the $99 price point even more attractive to budget conscious smartphone buyers, but so far there isn't any tangible evidence to support the rumor.