Apple iPhone 3GS 8GB In Time For Christmas?

Is Apple planning a quiet iPhone update?  That's what The BGR has heard, with two AT&T sources suggesting that the iPhone 3G 8GB will be replaced with an 8GB entry-level iPhone 3GS in time for Christmas.  The move is apparently intended, one of those sources claims, to better battle the DROID army from Verizon.

The iPhone 3GS 8GB would keep the same $99 price point as its simple-3G predecessor, but get the same speedier chipset and other benefits of the newer 3GS range.  Currently by offering the last-gen model Apple have been able to provide a low-cost entry into iPhone ownership – aided by the fact that cosmetically the two devices are pretty much identical – but we're guessing that economy of scale and the natural drop in manufacturing costs is making it more realistic to build a 3GS with 8GB of storage rather than continue producing two different devices.