Apple's 3G iPhone will be sold for €100 (£80) in Spain through Telefonica's Movistar, according to local reports.
The €100 iPhone will be made available to customers signing-up for a 24-36 month contract, according to the report, and will also feature a video camera and GPS.
The report follows one from The Times last week, which claimed the 3G iPhone will be made available in the UK for a subsidised price of £100. Similar US reports have made similar claims on behalf of Apple's network partner there, AT&T.
A string of analyst comments reported today lend weight to the subsidy speculation. "It will be subsidised,” said CCS Insight analyst Ben Wood. "But it won't be free. O2 customers will have to take connections or contracts at the point of purchase. They will have to sign on the dotted line. That’s how they will make sure they get their money back," that analyst said.
Bernstein analyst Toni Sacconaghi believes subsidising iPhone prices will put the device in reach of more consumers - and potentially double sales. That, and the introduction of the device to most worldwide markets, should help Apple to secure its ten million sales target for the current financial year. Apple has sold just over 5 million iPhones since launch.
Apple's moves to widen distribution of the future version of the device recently led Piper Jaffray analyst Gene Munster to observe the total addressable market for the device to have grown from 150 million potential customers to almost 600 million.
During Apple's financial call on April 23, the company's chief operating officer, Tim Cook, said: "The carrier partners are free to price the iPhone as low as they wish and beyond that, I wouldn’t comment on the specific commercial arrangements between us and the carriers because those are confidential.”
While speculation favours the introduction of the iPhone at WWDC next week, it's widely believed the device won't actually ship until the first anniversary of the iPhone's US launch, 29 June.