Vodafone has just announced via Twitter that the 16GB iPhone 3G will get a price drop to $979 from $1129 without a 24 month contract starting June 24th. The prices for iPhones with contracts however will remain unchanged. The $979 price tag used to belong to the 8GB iPhone 3G so we're expecting a price drop on that too though Vodafone has not commented on what that price might be. Looks like they're trying to phase out the 16GB 3G model to get ready for the 3GS which is due to hit our shores in July and will come in 16GB and 32GB versions.
$979 is still a high price to pay for what will soon be a last-gen phone and if the contract-free prices of the iPhone 3GS are set to be the same, shelling out $150 more for a faster/better processor, compass, 3MP camera with autofocus and video, voice control and twice the storage space (not to mention it'll be future-proof for at least a year) is a no brainer. Best hold off on that impulse by.