Get ready, iPhone fans: Apple (Nasdaq: AAPL) is preparing to dispense that elusive fourth-generation iPhone.

We've known about improvements to the iPhone's software for some time, including long-overdue multitasking features. The hardware has been seen in passing, under furtive circumstances worthy of an industrial spy novel. And of course, one would expect Steve Jobs to introduce the new phone when he takes the stage at the Apple Worldwide Developers Conference in two weeks.

But the evidence is getting more concrete by the hour. Wal-Mart Stores (NYSE: WMT) reportedly just stopped taking orders for older-than-Methuselah iPhone 3G handsets and issued a press release that it had dropped the price on the 3GS model from $195 to $97 with a two-year contract with exclusive carrier AT&T (NYSE: T). 3G phones are now hard to come by through Apple's own online store as well. This is often a sign of impending obsolescence, as Apple and its retail partners clear out old stock to make way for the new hardware. And this time, some features of iPhone OS 4.0 are reportedly not compatible with 3G iPhones, making the model instantly expendable.

Jobs doesn't seem to have any qualms about squeezing every last available penny from his customers. The reason he gets so upset when details on upcoming products leak to the press is because that public knowledge can be "immensely damaging" to Apple as "people that would have otherwise purchased a currently existing Apple product would wait for the next item to be released." That's according to court documents, not a rumor or a Tweet. Hey, as long as consumers are playing along, that's just good business sense. In any case, we'll soon see the amazing, magical product Jobs fought so hard to keep under wraps. (Magic wand or flying broom? You decide!)

The onrushing flood of competitors that includes Google (Nasdaq: GOOG) Android phones, the Palm (Nasdaq: PALM) Pre that Hewlett-Packard (NYSE: HPQ) snatched back from the edge of the grave, and whatever BlackBerry tricks Research In Motion (Nasdaq: RIMM) might have up its sleeve are up against some formidable competition here. 

The 3GS is a fine phone and arguably a steal at $97 per unit, and the next-generation iPhone will surely have some hitherto undiscovered wrinkles to make it a worthy successor. The summer looks like a fine time to pick up a smartphone, and the coming holiday season should truly separate the wheat from the chaff. With the mobile market coalescing around a small group of winners, the door for major market share moves is creaking to a close.

Would you buy a discounted iPhone 3GS or just wait for something better? Please discuss in the comments section below.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Wal-Mart Stores is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.