16GB iPhone 4S drops to $99, 8GB iPhone 4 free with contract

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With the launch of the iPhone 5, the 16-gigabyte iPhone 4S will drop to $99 with a two-year contract, while an 8-gigabyte iPhone 4 will be available for free.

The new pricing was announced by Apple on Wednesday at its iPhone 5 keynote. No mention was made of the iPhone 3GS, suggesting it will no longer be available, though some have expressed belief that it will continue to be available contract-free in developing countries.

The iPhone 5 pricing matches last year's iPhone 4S pricing structure: $199 with a contract for the 16-gigabyte model, $299 for 32 gigabytes, and $399 for 64 gigabytes.