A cheap iPhone 3GS for the end of year festivities?

According to BoyGeniusReport who has received information from two different sources, Apple could launch for the end-of-year festivities a cheaper iPhone 3GS for $100. It would be different from the current models and have 8 GB of memory which is sufficient for many people. After a subsidy, it would cost $99. 

The acknowledged goal is to fight against the newest iPHone Killer from Motorola, the DROID.

If you are curious about other thing besides the iPhone, Engadget published a complete test of it.