It's still not that cheap though. £639 minimum over 18 months is a LOT more than many of my friends pay. They usually stretch to maybe £100 for the handset on Pay and Go and after that won't spend close to £30 per month.
I agree. The price drop for the iPhone 3G hasn't done much. It is still one of the most expensive phone available. And, at least with last one, you could in theory, get it on pay&go for the price it was sold for, as they did not require you to be locked to a contract when you left the store, which meant it could be jailbroken. I just wish I knew that when the price dropped to below £200. Oh well, bring on the 3G.