Why bothering offering iPhones for $199, when you can give away iPhones for free?

That seem to be the marketing strategy of UK carrier O2, who's offering the handsets as an enticement for their £45 and £75 tariffs plans. O2 can afford to do this because quite simply, £45 is a lot of money - $89 in dollars or $148 for the £75 plan.

So what is it that could undercut the price of the most hyped cell phone ever?

It turns out an even newer iPhone. With the still semi secret 3G iPhone set to hit the marketplace this summer; mobile operaters with iPhone exclusives are scrambling to sell their existing inventory before it becomes obsolete.