Will AT&T really be offering a $200 subsidy on the 3G iPhone?

I've been saving up my mobile device PayPal funds for the upcoming U.S. 3G version of the HTC Touch Dual, but with Fortune's news of serious iPhone deals that may have the 3G iPhone available from AT&T for as low as US$199 I think the 3G iPhone just moved to the top of my list. According to their source, AT&T may subsidize US$200 of the iPhone 3G when people renew or purchase a new contract for 2 more years of servitude service. They also stated the new iPhones would be coming in at US$399 and US$499 for 8GB and 16GB models. I think the US$200 subsidy may be correct, but I imagine Apple will also have a 32GB model available.

The US$200 subsidy is not surprising news since all U.S. wireless carriers offer serious subsidies for devices. You can find high end Windows Mobile phones available for under US$100 or even free. BlackBerry and other devices are also offered with major subsidies because the carrier makes the majority of their money on your monthly bill and all the additional services (data plans, wireless TV or music, ringtones, etc.) you pay for when you get your new device. I stood in line and paid US$599 for my iPhone last year and if this news is true you may see me doing the same for US$300 less this June.

The Fortune article also mentioned current iPhone users fork over US$100/month on average for their iPhone service. I am not sure what plan they are paying for, but I pay just under US$70 for my iPhone plan each month. Granted, I limit myself to 200 text messages, but I rarely make that many calls and have thousands of rollover minutes available.

If people can pick up the 3G iPhone for as low as US$199 then I think you will see lots of people switching to AT&T and the iPhone's market share will significantly increase.