Today the Associated Press reports that Wal-Mart will be reducing the price of the 16GB iPhone 3GS to $97 on contract. At this time, the price cut seems to be USA only.
The 16GB iPhone 3GS retails for $199 on a 2-year agreement with AT&T, so $97 is a considerable savings. The low price point was previously occupied by the iPhone 3G.
With all the news of a next generation iPhone coming in May, this is yet another sign that Apple is attempting to reduce inventory of the soon to be previous generation device. Reports earlier today also pointed to a lower priced $99 iPhone 3GS.
Apple is widely expected to introduce the next iPhone during the second week of June during its annual WWDC event.