Walmart Tuesday said that it will drop the price on the 16GB iPhone 3GS to $97, cutting the price by more than half from its current $199. The 32GB model remains on the retailers website at $297.

The move comes just weeks before Apple’s Worldwide Developers Conference (WWDC), where Cupertino is expected to unveil an iPhone hardware refresh to compliment the recently released iPhone OS 4.0. Many believe WalMart is clearancing the older iPhones to make room for the new models.

A surprising number of leaks, including a highly publicized report from Endgadget, have plagued this latest iPhone revision. While nothing is official, the latest leaks suggest a phone with front-facing camera, a new brushed-aluminum casing, 5 megapixel camera and a higher resolution screen.

Yesterday Apple reported that Steve Jobs will deliver the opening keynote at WWDC on June 7. Due to illness, Jobs was absent at last year’s event.