Absolutely bloody outrageous! O2 are completely taking advantage of this iPhone monopoly. Wanting us to pay for the phone is absolutely fine, but expecting iPhone customers to buy themselves out of contracts is disgusting. The massive majority of those who really want an iPhone already have one and they know this! Every single iPhone 3G customer has at least 7 months to run on their contract, because if I remember correctly, it came out on July 17th last year. O2 are fully aware of the Apple loyalty that exists and are completely taking advantage of this and their customers, to the point of extortion. And also, the UK prices are less than competitive! $199 and $299 in the US - today's exchange rate: $1 = 0.62p. That equates to £125 and £188! So £184 and £274 is, quite frankly, daylight robbery!
Very poor form O2. I can't remember a time that a company has so blatantly and unashamedly ripped off it's customers. I'd love to think that 3GS sales would be diabolically low, with current iPhone customers refusing to pay themselves out of the final 3rd of their contracts, but we all know that won't happen. Extremely disappointing.