Major retailers who carry the iPhone have already started giving it $50 price cuts. That makes the iPhone 4S go for $150 and the iPhone 4 sell for $50. Walmart is the latest to join in on that trend.
This is something the retailers are doing as they gear up for the release of Apple’s next handset. In order to clear out iPhone 4 and iPhone 4S inventory, they drop the prices a bit in order to entice users. The thing to keep in mind, however, is that the iPhone 4S will likely drop by $100 at this point (to retail at $99 with contract), and the iPhone 4 may be offered free with a contract, just like the iPhone 3GS is right now.
They are just the latest, Spring, Target and Best Buy are already in on it.