Why did Apple Reduce Price for i-Phone?

68 days after product launch,may be no one had expected from $599 to $399.WoW!!reduced by 33%. in 5th september .
"We want to make iPhone even more affordable for even more people," was the reason Steve Jobs (CEO) gave."We want to put iPhones in a lot of stockings this holiday season."

So what are the circumstances ?
Apple promised to sell 1 million units of the iPhone thru end of September.If someone just bought their iPhone 10 days ago, they get a full refund of the $200+tax.People are believing that the iPhone isn't doing as well as everyone expected.Or will it be a lot cheaper to produce the next million iPhones than the first

As per other various websites & sources, Reasons could be:

1. Sales are slowing, and a price drop will re-invigorate them.

2. Other smartphones are entering the market

3. iPhone a high-end phone that sells a million units rapidly but then quickly loses momentum. 4. The new iPod touch was likely to undermine iPhone sales.

5. $600 was just short term profit maximization for the launch.

6. Apple has reached a milestone that can justify a price cut. Development costs have been recouped.

7. iPod Touch and iPhone have certain parts similar,bringing manufacturing costs down for both products.

8. Apple promised AT&T the price cut if they could offer the iPod touch this holiday season.

9. If Apple learned anything from the Mac war with Wintel, it was that maintaining hardware margins at the expense of marketshare was a mistake.

10. Clearing out inventory to make way for a 3G iPhone ASAP.

Q & A with Steve Jobs