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Faster iPhone Expected, Price Cut Predicted

Fortune magazine reports that AT&T is planning to cut $200 from the price of the low-end iPhone.
With new models of the iPhone expected to be introduced next month, it seems certain the price of at least one model of the iconic mobile phone will drop sharply to track recent iPhone price cuts in Europe. In addition, Fortune magazine reported this week that AT&T, the exclusive U.S. iPhone supplier, is planning to cut $200 from the price of the low-end iPhone.

Exclusive iPhone providers in the United Kingdom and Germany cut prices last month at least partly to clear their decks for new models. Germany's T-Mobile started the cuts by slashing handset prices from $487 to $120; T-Mobile charges more than $125 a month for some data plans, however. In the United Kingdom, O2 and Carphone cut prices, bringing the 8-GB iPhone model to about $200.

The iPhone hasn't sold as well in Europe as it has in the United States, where it commands a large -- and at time emotional -- user base.

According to Fortune, the $200 iPhone would carry a two-year contact and would have to be purchased from AT&T. Rebates won't be offered in Apple's retail stores, where an 8-GB iPhone sells for $399 and a 16-GB version for $499.

Hampered by the slow speed of AT&T's Edge network, iPhone users are expecting AT&T will announce models that will operate on its speedy UMTS/HSDPA, or 3G, cellular network. In the meantime, iPhone users can access high-speed networks when they can find a Wi-Fi access point.

The marketplace is also expecting iPhone models with more memory, possibly a 32-GB version. The Fortune report said the $200 version is "likely to be locked or programmed so buyers can't take the cheaper iPhone to another phone service."

Also last month, Italian media sources said an iPhone with UMTS/HSDPA capability is slated to be on the market in Italy this summer and that Telecom Italia Mobile won't have an exclusive deal with Apple to market the device.