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iPhones price plummets.

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iPhones price plummets.

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The cost of the Iphone is to plummet. Apple is to cut a third off the price of its iPhone just 2 months after it was launched. Chief Executive Steve Jobs announced a cut of around 150 Euros on the original price of nearly 450 euros. It is hoped the sacrifice will boost sales during the winter holiday shopping season.

But news of the price cut sent Apple shares down 5.13 percent. Investors interpreted the size and timing of the cut as signs that demand may not have lived up to the hype.

The price cut could put pressure on rivals Nokia, Motorola , Samsung and Palm to lower prices on their smart phones. Analysts said Apple dropped the price to make way for a more advanced model of the touch screen phone in Europe.

This is expected to launch with 3G high speed Web links. The current model only supports 2G speeds.

The iPhone is expected to launch in Europe during the next quarter.