This rumor has been flying around like crazy the last couple of days. It comes from leaked sources inside of Apple, but still nothing official. Price break down will be as follows: 16 Gig iPhone down to around $399 with the new 3 Gig iPhone coming in at a really cheap price (unknown at this time), 16 Gig iPod Touch at $299, and 32 Gig iPod Touch at $399.

It is also speculated that the 8 Gig iPod Touch, instead of a lower price, will be discontinued. The iPod Nano should be going for dirt cheap a few weeks after price drops, but don’t expect anything immediate.