French customers could be next in line to see a cheaper iPhone, if rumors of ongoing negotiations between Apple and carrier Orange are to be believed.  Reported in the French paper Les Echos, iPhones in France are currently priced at €399 ($629).  However the difference would be that Orange would begin subsidising the handset based upon the monthly cost of the contract users would take out, which up until now - and contrary to practices in other European countries where the iPhone is sold - they have not done.

According to Les Echos, Apple is disappointed with sales figures for the cellphone in France, 100,000 handsets of which have been sold since it went on sale there.  Takeup of the iPhone generally in Europe has been less enthusiastic than in the US, perhaps because 3G networks (and the handsets to take advantage of them) are more common and to some degree expected among European users.  As a result, Apple are encouraging all carriers to further subsidise the initial cost of the handset to boost sales, which some are seeing as a way to clear first-generation iPhones before the 3G version's imminent launch. 

Orange, however, is content with the current pricing, telling the paper that there is "'no question of changing the business model of the iPhone" and that "everything is going well", revealing that the carrier obviously had lower sales expectations than the manufacturer did.  They have countered Apple's suggestions with a request to re-open the revenue sharing agreement that sees the US company get a slice of every handset sale, presumably to minimise the loss Orange would see through subsidisation.

The 8GB iPhone has recently seen its price slashed in the UK, from £269 to £169.

[via iLounge]