Apple and Orange parent company France Telecom are renegotiating their iPhone deal with a view to lowering prices for the device in France, according to local reports.

Les Echos makes the claims, citing anonymous tipsters. It claims Orange executives met with Apple chief operating officer Tim Cook at Apple headquarters in California this week to discuss a price cut.

These talks follow recent price reductions on the 8GB iPhone model in Germany and the UK. The report claims Orange is considering applying a subsidy to iPhone prices in an attempt to shore up sales, though the company has denied this.

The report explains Apple is interested in subsidising sales because it is unhappy that just 100,000 iPhones have sold in France. However, in order to put the subsidy into effect the companies are reconsidering their revenue sharing arrangement.

Orange told Les Echos there was "no question of changing the business model of the iPhone" and that "everything is going well".

The 8GB iPhone now costs €399 in France, while costing just €99 next door in Germany.