There are a few theories about why Apple has dropped the price of the iPhone floating around the web.

a) Because Apple wasn’t selling enough iPhones at the higher price (except it sold almost 1 million of them…)
b) Because Apple thinks dropping the price will mean it sells more phones this Christmas (this is Apple’s official line)
c) Because if it was $200 more expensive than the iPod touch many potential iPhone customers would just settle for the iPod touch (well, I would)
d) Because Apple knew that there would be excited early-adopters prepared to pay the higher price (and there were, almost 1 million of them)

It’s hard to know which of the above reasons is correct. Or indeed if any of them are. I’ve got another theory though:

e) Because in order to sell the iPhone to customers in the UK (and maybe Europe) Apple was going to have to drop the price of the phone. And if it was to do that then the US customers would be up in arms - or coming here to do their Christmas shopping – I mean Holiday shopping…

In a few weeks we will see what deal Apple has managed to do with a UK network, probably O2 (at least at first – I reckon there will be more networks with the iPhone here by the end of next year).

The UK networks offer heavily subsidised phones to UK customers - often swallowing the entire cost of the handset. I shouldn’t think O2 were too keen on swallowing the cost of a £300 product. £200 seems a little easier to swallow.

For example, the HTC Touch handset is available on Orange, through the Carphonewarehouse for free. Users pay £35 a month for 18 months and get 500 minutes and unlimited texts every month…

If Apple wants the iPhone to be popular in the UK, the price has to match the market here. Maybe the price drop is setting the way for that.