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Monday, May 24, 2010, 12:55 pm PT (03:55 pm ET)

Apple stops shipping iPhone 3G to AT&T stores - rumor

With two weeks to go before Apple's annual Worldwide Developers Conference, a new rumor states that the handset maker has stopped shipping the 8GB iPhone 3G to AT&T stores.

Boy Genius Report reported Monday that Apple stopped shipping the iPhone 3G, originally released in 2008, to AT&T stores. In addition, new orders for the device are not being accepted. BGR has a respectable track record in revealing the plans of wireless carriers, including AT&T.

"Could this mean we might see the iPhone 3GS drop to $99 and make way for a new model? Or maybe the 3GS would disappear altogether? We're not sure," the report said, "but we're about to find out."

Earlier Monday, Apple revealed that Chief Executive Steve Jobs will deliver the opening keynote for this year's WWDC in San Francisco, Calif. In years past, Apple has used the keynote to introduce the latest iPhone. Last year, the iPhone 3GS was unveiled, and the 8GB iPhone 3G dropped to $99.

Analyst Katy Huberty with Morgan Stanley said she believes Apple will achieve a $50 decline in average hardware selling prices by reducing the iPhone 3GS to $99. She said that iPhone component costs have declined by 10 percent to 20 percent annually, which would allow Apple to reduce the cost of last year's model without affecting its gross margins.

Despite the attractive $99 entry price for the iPhone, Apple executives have revealed that consumers generally purchase the higher end iPhone 3GS models, available for $199 and $299. The average selling price of the iPhone with carrier subsidy included has consistently been just over $600.