From the Toys section:

With activation of new voice and data plans, AT&T Wireless has refurbished models of the Apple iPhone 3G 8GB Smartphone in Black for $49 with free shipping.  That’s the lowest price we’ve ever seen for a factory-packaged iPhone.  16GB iPhones are available for $50 more.  This deal is only available in the AT&T online store while supplies last.

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