I told myself before they announced the price that I would buy it if it were $399. To me, that would be a killer price point. I agree with you that if apple is pricing it at $499/$599 based on the cost of the nano and similar devices it makes no sense to be locked into a 2 year contract if they are not going to discount the price of the device. In that case, if I was required to have a 2 year contract I would probably bite on a price of $299 and have Cingular absorb the rest. I'm sure they won't be hurting.