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Will Apple kill the 8 GB iPhone and introduce a 32 GB model?

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Will Apple kill the 8 GB iPhone and introduce a 32 GB model?

Chicago (IL) – There is lots of iPhone inventory activity in Europe. Recent and unexpected price drops for the 8 GB iPhone in Europe indicate hint that the company may actually be killing the 8 GB model in June and introduce a 32 GB iPhone, next to the much anticipated 3G iPhone.

Apple’s UK and German mobile network operators, O2 and T-Mobile have made headlines with recent dramatic price drops. First, T-Mobile unexpectedly cut the price of the 8GB iPhone by 75%. German users who sign up for a two-year contract (89 Euro per month) can get the iPhone for just 99 Euro.  MobilityToday confirmed that Apple’s UK mobile network operator OK just discounted the 8 GB iPhone price by 37% to 100 pounds. Starting tomorrow, O2 will drop the phone to 169 pounds, while the 16 GB version remains at 329 pounds. Additionally, France Telecom’s Orange is expected to announce a price cut in France within the next days. T-Mobile’s promotion ends on June 30, and O2’s on June 1, just in time for an expected June launch of 3G iPhone.

It is worth noting that such drastic price drops are very unusual. Apple has had firm a iPhone pricing plan in place since the iPhone introduction last June. The company controls the pricing of the handset and neither AT&T in U.S. nor European mobile operators were allowed to subsidize the iPhone as such a move is perceived as a devaluation the product.

Having said that, the T-Mobile and O2 discounts are the first exceptions to this rule and signal an inventory clearance ahead of the 3G model launch. Analysts believe that price drops will be limited to Europe as the phone is apparently still selling as expected on these shores.

So, what does this activity mean? Common sense suggests that Apple may be discontinuing the 8 GB iPhone and may be introducing 32 GB model as a new flagship in June. That’s not surprising at all, if we recall the last holiday season when the company phased out the 4 GB model and introduced a 16 GB version. Of course, if there will be a 32 GB iPhone, that means that there is a 64 GB iPod touch in the works as well. It is very likely that such scenario is at play since Apple has established an obvious pattern of the iPhone/iPod touch marriage: The iPod touch models replicates existing iPhone models in capacity, adding one more model with twice the capacity of the flagship iPhone.

Following this established pattern, the iPhone/iPod touch memory upgrades will create the following iPhone/iPod touch offerings: 16/32GB iPhone and 16/32/64GB iPod touch models. Bargain flash prices support this speculation that (expensive) 32 GB iPhones and 64 GB iPod touch models are coming our way.

Upcoming memory upgrades indicate that Apple has no intention to simply replace the current gen iPhone with a 3G model. Instead, the company may introduce 3G iPhone and slash current-gen iPhone prices, to create the entry-level iPhone everyone has been waiting for. An industry source told TG Daily, 3G iPhone will be priced from $399 – $599, depending on the amount of memory. This means current gen iPhone has to drop below $399 mark. A $299 or $249 model suddenly sounds very possible to us.