Mobile phone users in Germany can now get an iPhone for just €99 (£77).
T-Mobiles Apple iPhone deal is a first - the iPhone hasn't been subsidized by operators before. The deal also ads credence to rumours about an imminent new 3G model.
"This price cut will raise a few eyebrows, and is very interesting indeed," said Ben Wood, analyst at CCS Insight.
It's interesting both because the iPhone hasn't been subsidized before, and because it could mean the launch of a new 3G capable model is getting close, according to Wood.
"That could mean T-Mobile is clearing the channel for a new model" said Wood.
The 16GB model still costs €499. The promotional price for the 8GB model is valid from April 7 to June 30 for customers signing up for T-Mobile's most expensive calling plan, the Complete XL, which costs €89 per month. The price of the iPhone rises to €249 when bought with the Complete S contract, which includes fewer minutes and text messages, and costs €29 per month.
T-Mobile's pricing strategy is a big departure for the iPhone. So far, Apple has gone to great lengths to stop carriers from selling its phone at lower prices to protect it's music player market, according to Wood, who questions whether Apple is happy with the price.
"Now we'll have to see if O2 and Orange decide to offer similar price cuts to get the market moving again. The feedback we are getting from the channel is that sales have slowed down quite considerably during Q1," said Wood.
The cost of the phone has been a significant barrier in Europe, according to Wood.
"You could go into a store and get a Nokia N95 for almost nothing. €400 for an iPhone has been one step too far," said Wood.
According to T-Mobile, it's business as usual.
"I don't want talk about subsidies. After a phone has been out for five months its quite normal to do sales promotions, and Apple is of course on board," said Alexander Graf von Schmettow, spokesman at T-Mobile.
He hasn't much to say about new models: "No comment. You have to ask Apple about that."