The mobile phone company O2 is slashing the price of the smaller
version of Apple's iPhone by £100, amid fears that sales of the
combined phone and music player have stalled as the California computer
company prepares to launch a better version over the summer.
From
today the "basic" 8GB version of the phone - which can store roughly
2,000 songs - will be £169, compared with £269 when the device went on
sale in the UK just before Christmas.
Customers willing to buy
the phone, however, will still have to pay O2 at least £35 a month for
their calls and texts. The price of the larger 16GB phone will remain
at £329.
Anyone who does rush out to buy the cheap iPhone,
however, may find themselves regretting the decision by the summer as
Apple is expected to launch the so-called 3G version of the iPhone at
its Worldwide Developers' Conference in San Francisco in June.
The
speculation - which Apple has refused to comment on - is that there
will be an 8GB version of the 3G phone in the US for $399 (£200) and a
16GB 3G iPhone for $499. There has also been talk of a 32GB 3G iPhone
for $100 more.
The existing iPhones stocked by O2 - and its sole
independent retail partner, Carphone Warehouse - use the old so-called
2G mobile phone network.
Customers can connect to the internet
over their home computer network or public Wi-Fi access points, but
where this is not an option the existing 2G phone can be very slow to
download information. Music tracks cannot, for instance, be downloaded
from the iTunes store on to the phone without a Wi-Fi connection
because the mobile network is so slow. The next-generation 3G iPhone,
however, will have a much faster connection to the mobile internet.
Apple's
exclusive network partner in Germany, T-Mobile, has already slashed the
cost of its 8GB current generation iPhone to just €99 (£80).
O2,
which has the iPhone under an exclusive deal with Apple, said the
decision to launch its price promotion, which will run until June 1,
"will create additional momentum for what has been O2's fastest selling
device".
Others in the industry, however, believe sales have been
slowing down. O2 maintains it has hit its target of "several hundred
thousand" phones sold since launch.
But after the initial hype
died down, sales are believed to have slackened off. The company
recently resumed its TV advertising campaign for the phone.
Rival
handset manufacturers such as Nokia, LG and Samsung, meanwhile, have
produced similarly shaped phones that can play music and are free to
new customers of other mobile phone networks.
