$199. for 8 gb and 299. for 16gb. If you sign up a 2 year contract. Which after the 2 years contract, You would have paid a little over 2k. It is not actually cheaper than the first iPhone. It is almost the same price wise. You will be paying more than what they charge for the data plan for the 1st gen iPhone. But if you buy them at the Apple store, It would cost you at least $500. without the contract. The good thing about it is if you are an existing customer, You can just call AT&T and activate your phone, You are still paying more since they jack up the price for the data plan, At least you are not tied up for 2 years. I am surprise Apple has not announce its price yet. It's their marketing strategy, and they are somehow trying to trick consumers. Think of it, Why would they sell it at the same price at AT&T (w/ contract) and Apple store without contract? If that is the case, then people would just get it at the Apple store, But that is not the case.