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I’ve had plenty of friends ask me recently, “So, when are we going to see a next generation iPhone?” Most of them are of the cautious ilk, and avoided the first generation iPhone, noting that it’s probably buggier than people are willing to admit. More than a handful said they wouldn’t pay $399 for a device that ran on EDGE. This rumor, while regarding a new iPhone, doesn’t address the 3G or second-gen issue. Rather, it’s a capacity thing. Rumors are hitting the Internets that a 16 GB iPhone will drop in the next week or so. This morning, CNet confirmed it.

This is based off tips coming to Engadget, who posted this photo:

They then heard that British carrier O2 has notified their staff of the 16 gigger’s release. The price there is 329 pounds, which would be $599 here, but the device will drop for $499.

[Engadget]

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