Apple accepts subsidies for new iPhone

CUPERTINO, Calif., June 7 (UPI) -- Apple has changed course and will accept a subsidy from U.S. and European telecom providers to bring down the price of its new iPhone, sources said.

The Financial Times, quoting unnamed sources, reported Saturday Apple, based in Cupertino, Calif., has bowed to the realities of the economic downturn and will accept subsidies from AT&T, O2, France Telecom and Deutsche Telekom to produce a more attractive retail price for the popular device, the new version of which is set to be unveiled Monday.

The Financial Times said the subsidy arrangement should make it easier for Apple to hit its goal of selling 10 million iPhones in 2008, which was looking more difficult as the U.S. economy faces recession. The first iPhone, which wasn't subsidized, sells for $399.

The telecom operators are willing to issue the subsidies for iPhones because the devices give them a platform for advertising and other revenue streams, the newspaper reported.