Rumors have been flying around since quite some time for the 32GB iPhone. AT&T adds fuel to the speculation by offering the 8GB refurbished iPhones for $99. Macblogz has received an anonymous tip which points the the release of the 32 Gig iPhone - “That rumored red iPhone… It’s not happening. The only iPhone news I know for certain is that it’s getting bumped to 32GB in January,”

In order to sell a less-expensive iPhone, priced (let’s say) at $99, Apple would need to introduce a new model with less storage. The current models would get bumped in specs, and a cheaper iPhone would be introduced and outfitted with less storage than its bigger brothers. The current 8GB iPhone would have absolutely no place in this line up, and will probably be discontinued. At the same time, for Apple to increase or double the iPhone’s storage, they would need to either raise the price, or increase the iPod touch’s storage capacity as well, in order to avoid significant cannibalization, or confusion among consumers.

[Macblogz]