Apple-iPhone-4Best Buy has dropped the price of the iPhone 4, on contract, to $49.99.

Just last week the phone rang up at $99.99 at Best Buy. The $50 price drop brings the price of Best Buy’s iPhone 4 (8GB version) in line with the prices at Target and Radio Shack, which discounted their iPhone 4’s earlier this month. The $49.99 price at all three retailers is based on the smartphone being purchased along with a new, two year, service contract with Sprint, AT&T, or Verizon. Off contract, the iPhone 4 is priced at a hefty $599.

The iPhone 4 price drop comes at an interesting time. There are rumors floating about that Apple may launch an iPhone 5 sometime this summer. Some are speculating the iPhone 5 may be introduced to shoppers as soon as June 11 (the opening date for the World Wide Developer Conference).

Are Best Buy, Target, and Radio Shack trying to clear out inventory before the launch?

Sprint, AT&T, and Verizon are all still charging $99.99 for the 8GB version of the iPhone 4 (on contract), though AT&T does have a refurbished model for $49.99. Apple also has the iPhone 4 still available through their site for $99 with a two year contract from any of the three carriers.

The iPhone 4 was launched during the summer of 2010. Pre-orders began June 15, 2010, so if Apple reveals the iPhone 5 at the World Wide Developer Conference next month, it would make the release a very clean and neat two year generational loop – and Apple does like to keep things clean and neat.

The iPhone 4S, which added some hardware and software features to the iPhone 4, launched in October, 2011. The 4S currently sells at Best Buy for $199. We’ll let you know if we see any movement on that price before or after the iPhone 5 comes out.