Check out the "early upgrade pricing" when you read more.
The iPhone 3G S early upgrade prices will be $399 for the 16GB model and $499 for the 32GB. These prices will be posted on AT&T's website tomorrow, June 18. Although full retail prices will remain the same at $599 for 16GB and $699 for the 32GB iPhone 3G S, you'll now be able to buy without a contract. Today's announcement gives iPhone customers who are upgrade eligible in July, August or September 2009 the ability to upgrade for only $199 or $299.