There's a report on MacNN today about the increasing interest in the 3G iPhone in the UK. Part of the reason is that subsidies provided by O2 will make the new phone free for some shoppers on July 11th. "Free" is a powerful motivator, but interest would have been just as high without that four-letter word.
When the iPhone was first released with its now-infamously high price tag, It was purchased (in large part) by Apple's rabid fans, who evangelized the thing to everyone they met. Many of those people thought, "Nice, but the price is high."
Which leads to my second point. Namely, pricing sends a message. When you notice the discount bin at your favorite record store, you think, "lousy music in there." The $3.99 CDs can't possibly be good. Conversely, the $19.99 new releases must be awesome. I mean, they're twenty bucks!
Next month, all the people who were swooning over the iPhone but put off by the price tag will descend upon Apple Stores in droves. Expect quarterly sales figures to exceed expectations, as Apple is going to sell a boatload of iPhones.