O2 drops iPhone prices to clear stocks for new model

O2 UK will start offering the iPhone 3G for free on its £35 and £45 monthly tariffs in May in order to clear stocks before the launch of a new model, claims trade website Mobile.

Currently, the 16GB iPhone is only free on a £75 contract, while the 8GB model is free on £45 and £75 tariffs.

Mobile suggests that a new iPhone will be available in June or July. However, the site suggests that rival operator Orange may also be selling the new device, bringing an end to O2's exclusivity.

The chatter around a new iPhone (or, indeed, new iPhones) is mounting, and will be boosted by yesterday's announcement that Apple will show off the iPhone 3.0 software next week at a media event.

New iPhones AND new firmware in June or July? It all seems to be falling into place...