Anecdotally, people I worked with all jumped on the iPhone 3G simply because it "cost less" than the original. $200 up front is a lot easier for most consumers

Anecdotally, people I worked with all jumped on the iPhone 3G simply because it "cost less" than the original. $200 up front is a lot easier for most consumers to swallow than $400 up front, regardless of any price difference over the life of the contract.