A new round of rumors claim that Apple may be on the verge of discontinuing the iPhone 3G model. The company’s 3GS model will replace 3G and drop to $99 in favor of faster hardware. Apple is expected to sell the iPhone 4G for $199 and $299, respectively. It would make sense for Apple to drop the 3GS to $99 to entice more consumers. Besides, 3G is old hardware that won’t support processor and memory intensive features like multitasking in iPhone OS 4.0. Another confirmation to Apple’s plan is Wal-Mart’s retail price for 3GS, which currently stands at $97, a steal in comparison to the $199 price.

While Apple and AT&T in the US are doing fine with 3G models, international stores in Asia and Australia are running out of inventory, BGR reports, and Apple is not ordering more. We have a feeling once US stores run out of iPhone 3G inventory, Apple will stop placing additional orders for US as well.