O2 to reduce iPhone 3G pricing in May

O2 is poised to tweak prices on the iPhone 3G in May, ahead of what is believed to be a new model iPhone in June or, most likely, July, Mobile Today are reporting.
The 3G iPhone will be free on its £35 and £45 per month tariffs from May. The 16GB version is currently only free on the £75 per month contract, while the 8GB handset is free only on the £75 and £45 per month deals.
Customers currently spend between £59 and £159 for an iPhone on the £35 and £45 monthly tariffs.

O2 is believed to be keen to clear its inventory of the iPhone 3G’s ahead of the new device which is similar to events last year leading up to the iPhone 3G announcement by Apple. Now all that remains to be seen is what device or devices Apple will bring us if any.

They have an event planned on the 17th March to show a preview of the 3.0 firmware for the iPhone and a new SDK(Software Development Kit) so it must be a reasonably big change a) for an official announcement and b) to require a new SDK.

Maybe Apple also plan to announce a new model or models at the same time and with competition growing especially from the Palm Pre the time is right for a refresh.