At the occasion of a special event [1] scheduled earlier today, Apple announced a price drop for its iPhone as well as a custom ring-tones service.

In a surprising move, Apple has announced the 4GB version of the iPhone will no longer be available and that it is dropping the 8GB iPhone's pricing by as much as $200 to $399. The iPhone was previously priced $499 for the 4GB version and $599 for the 8GB version.

In addition to that, Apple announced a custom ring-tones service. For 0.99, users will be able to convert any iTunes purchase to a ring-tone then sync it with your iPhone.

Support for this feature will be included in a forthcoming versions of iTunes and iPhone software.