iPhone 4 prices fall ahead of iPhone 5 release?

Mobile network operators have started to cut the price of iPhone 4 handsets, as speculation mounts that a fifth-generation iPhone will go on sale after the summer.

Orange, for example, is promoting a deal with a free iPhone 4 on a 40-a-month contract, and the handset is now also available for free from Vodafone and T-Mobile. Carphone Warehouse has "web-only" deals for the iPhone 4 starting at 35 a month.

The price cuts mirror price drops in the US, where AT&T, the largest operator of iPhones, has been dramatically cutting prices of the iPhone 3GS to as low as $9 (6) for a refurbished model, according to reports and reducing prices of the iPhone 4. The iPhone 4 was on sale at a 25 per cent discount in Wal-Mart stores in the US last month. Verizon, the other US carrier offering the phone, is also reported to be discussing a price cut.

According to technology price comparison site Skinflint, iPhone prices have already dropped by more than 100 since the white iPhone 4 went on sale in April.

Rumours persist that a new iPhone model could go on sale as early as September, although commentators are divided on whether it will be an iPhone 5, or an uprated iPhone 4, perhaps an iPhone 4s.

Business users, though, will need to decide whether buying an iPhone 4 now will give them access to what is, still, advanced technology at a lower price, or whether they should wait for the next model and its new features. In order to secure a free iPhone, users have to commit to 24-month contract.

"Prices of the iPhone 4 have come down in different stages, over the last few months, but whether that is indicative of an iPhone 5 coming out, I can't comment," said a spokesman for Carphone Warehouse.

Nokia recently cut the price of its flagship N8 smartphone, as competition for higher-end handsets mounts.

Apple also recently previewed its iPhone iOS 5operating system.