New York: The much sought after Apple phone will cost as little as half the price of the original model when 3G iPhone is introduced in market late June in the US.

AT&T, the iPhone sales partner with Apple for the US market, will cut the price by as much as $200, bringing it down to $199 for customers who sign two-year contracts, the Fortune magazine reported on Tuesday.

Apple is expected to have two versions of the new iPhone, an 8 GB memory and a 16 GB model, which otherwise would be priced at $399 and $499. AT&T's strategy is that at $200, the iPhone would be affordable for a wider swathe of customers, pulling them away from rivals like Verizon Wireless, Sprint and T-Mobile.

The $200 rebate would be limited to AT&T customers and not available through Apple's stores. The new iPhone sold by AT&T is likely to be so locked that the user cannot take it to another phone service.

AT&T can easily recoup the $200 subsidy because the average monthly mobile bill is around $50. Moreover, the average iPhone user pays $100 monthly due to the higher priced data and calling plan.

The new iPhone will be 2.5 mm thinner than the 11.7 mm original. It will also have a GPS chip for navigation and other location-based services, Fortune noted.

Source : IANS