Price cut just 68 days after launch

Apple has cut the price of its much-anticipated iPhone by a third, to US$399 (£197), only 68 days after its launch in the US.

Chief executive Steve Jobs said on the Apple web site: “Even though we are making the right decision to lower the price of iPhone and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price.”

Apple will offer a US$100 (£49) credit note to people who bought the iPhone at its original US$599 (£296) price. There will also be a full US$200 (£99) refund for those who bought it in the past 14 days.

Apple is poised to launch the iPhone in the UK before the vital Christmas shopping period. It is expected to announce that it has signed O2 as its partner in the UK.