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I'm not sure if the iPod price will drop. You are committing to spending $360 a year on the iPhone in addition to a normal voice plan. The total cost of the iPhone 3G over a free phone on which you don't use data access is $200 for the iPhone + 2 years * $360 a year for 3G data. So the iPhone will cost you $920 to use for your contract, whereas the iPod will cost $300. Apple is getting whatever subsidy the phone companies are doing, so I think they want to make the iPhone cheaper. People look at it and see it as $200 vs. $300 for an iPod, ignoring the high service costs. The iPhone being cheaper makes the monthly bill from the phone company seem less harsh. If they were the same, more people might think about getting an iPod Touch with no monthly service fees attached.
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