AT&T is cutting the price on Apple’s iPhone 3GS in half, offering the devices for $49, down from $99, for users on contracts, Bloomberg News reports.

According to the article, the price cut goes into effect today, Jan. 7. However when TVWeek went to the online Apple store today (Jan. 7th) the 3GS was still being offered for $99.

The IPhone 4 still has a pricetag of $199.

The price drop for the iPhone3GS comes as AT&T says it plans to introduce 20 new devices this year for its faster next-generation mobile network.

The price cut on the iPhone will help make way for the new lineup later this year, the story notes. AT&T also wants to keep customers as it’s expected to lose its position as the only retailer of iPhones in the U.S.