Does anyone know if the iphone 4 prices are set to drop now the iphone 4 S is (almost) released?

Once the 4S has been released, Apple will only be doing the (new lower capacity) 8GB iPhone 4 and the 8GB 3GS. No more 16GB and 32GB iPhone 4.

Its a smart move really by Apple, cut the memory to lower the price, they did the same with the 3GS, Its still gonna be more expensive that the SGS2, the best android phone on the market at the moment.

Memory prices have fallen another 30% in the last 12 months.

Without the mega expensive screen build costs are no doubt lower than the Galaxy S2.

yeah, of course. iphone 4 will be replaced by iphone 5 sooner or later. and the updating speed of electronics(including iphone) is very fast.