I just had a nice chat with Mark Siegel, AT&T Mobility Executive Director-Media relations about the new iPhone 3G. Mr. Siegel tells me that current iPhone customers and any other AT&T customer that is currently under a contract will be able to upgrade to the new iPhone 3G simply by agreeing to a new 2-year agreement and pay the $199 or $299 price for the device.

Mr. Siegel also tells me that the $199 or $299 prices are the only prices the handset will be offered at. When I pressed about the rumored subsidies Mr. Siegel replied, “That price is the subsidized price.” We could take that to mean that the retail prices Apple announced is taking into account the subsidies from the various iPhone partners around the globe.