Yes, the iPhone 3GS introduced enough power to record video, a compass, voice control and a 3-megapixel camera. But with the iPhone 4 coming soon, the price of the 3GS will drop to $99 for the 16GB model just as previous models of iPhone dropped in price when a new model came along. This appears to be the only model of 3GS that will soon be available, with the iPhone 4 available in 16GB and 32GB configurations. If you're a bargain hunter and you don't need all of the new features announced today, mark your calendar accordingly.
The iPhone 3G will no longer be sold via Apple or AT&T once the iPhone 4 launches.