The cost of Apple's iPhone will be cut by £100 to make room for a new and improved model.
Consumers will be able to buy the 8GB version of the handset for £169 until June 1 after O2 and Carphone Warehouse decided to drop their prices.
The move comes amid growing speculation that Apple is about to launch a new 3G model of the iPhone, which will lead to faster internet access.
Currently, the touch-screen gadget uses technology known as Edge, which can be twice as slow as 3G and covers only a fraction of the country.
Analysts said that the price cut was also part of a drive to increase sluggish sales of the handset, which doubles as a camera, digital music player and internet web browser.
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iPhone price slashed by £100
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