O2 could make Apple's 3G iPhones available for just £100 each in the UK, according to a report in The Times.

The newspaper says analysts believe Apple will allow mobile phone partners to subsidise the cost of the second-generation iPhone, which looks likely to be officially announced this month.

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Mobile phone customers in some countries may even be able to pick up the new iPhone for less than £100, according to analysts at UBS. The Times reports that the smartphone could be available for €99 (£79) on the continent.

Meanwhile, CCS Insight analyst Ben Wood said Apple will give mobile operators more input into the price of the iPhone in each country. "They are also looking for more flexibility on how the operators can price the iPhone, although I am not convinced that they will let them have open season on the price, as they have a lucrative iPod market to protect."

The Times also reports the new model will ship in July, shortly after its US launch.

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