Retailers will give away the new version of the iPhone to customers who sign up to certain contracts, they said today.
An updated version of the combined iPod, mobile phone and internet browser, called the iPhone 3G, will go on sale in the UK on July 11.
The new, cheaper gadget features a high-speed 3G internet connection and GPS satellite positioning.
It was unveiled last night by Apple chief executive Steve Jobs in the US where it will cost 199 dollars (£100), compared with £269 for the original last November.
Mr Jobs said: “We did figure out what our next challenges are, the next mountain we have to climb.
“The number one reason people didn’t buy the iPhone was that they couldn’t afford it, so we need to make the iPhone more affordable.”
It will still only be available in the UK from 02, Carphone Warehouse and Apple stores, and will only work on the 02 network.
The Carphone Warehouse today announced it will give the iPhone away for free to customers who sign up to a £35-a-month contract over 18 months.
Carphone Warehouse chief executive Charles Dunstone said: “The iPhone 3G is a massive step forward for mobile internet.
“The iPhone continues to lead the pack and now customers will have fast, simple access to true internet on the move. It’s rare for a mobile phone to cause global excitement but iPhone sets the standard for others to follow.
“We’re expecting a huge demand when it goes on sale across our 800 stores on 11 July and there are some great upgrade offers for those that have previously bought an iPhone on the O2 network.”
O2 will give away the 8Gb version of the iPhone to customers who sign up to tariffs costing £45 or £75 a month.
The gadget will cost between £59 and £159 for customers on other tariffs.
Analysts have said Apple needed to slash the iPhone’s price and make it usable on faster networks to hit the company’s target of selling 10 million units by the end of 2008.
Apple said the 3G iPhone downloaded data twice as fast as the older ones.
Mr Jobs said Apple had sold six million iPhones since the first model launched nearly a year ago and 700,000 since March.
Mr Jobs showed off the new models of the iPhone and about a dozen new applications for the device at Apple’s Worldwide Developers Conference in San Francisco.
New applications range from video games that use the iPhone’s motion-sensing technology to guide characters, to study tools for medical students and a programme that allows users to find nearby mobile phone-carrying friends on a map.
Mr Jobs said Apple waited to improve the iPhone for use on the faster network because the chips available when the gadget first came out sapped too much battery life and were too bulky to fit the iPhone’s slim design.
