Apple will discontinue the 4GB iPhone when inventory is depleted and have also cut the price by $200.

The 4GB iPhone is currently available through the Apple Store for $299. This is the same price as the new iPod touch and reflects a $200 price drop from the launch price of $499. The new price can be found in the Special Deals section of the Apple Store while supplies last. These are not refurbished iPhones. Steve Jobs alluded to this when proclaiming the popularity of the 8GB, which also say a significant price cut.