Steve Jobs was characteristically bullish as he launched the new iPhone tonight, but by Apple standards the company’s venture into mobile handsets has been a funny kind of success story.

Admired for its technical prowess and coveted for its slick design and tactile interface, the iPhone nonetheless failed to sell as well as Apple hoped. Now, a faster version of the sleek device will be available at a much lower price, eliminating the main technical and economic barriers to purchase.

That is probably enough to perk up sales, especially in Europe, where people have been waiting for a 3G iPhone since before the last model arrived on the shelves. What consumers have to pay in monthly fees remains to be seen, but cutting the up-front cost to the £100 mark makes signing the contract less painful.

This marks a substantial departure from Apple’s policy of keeping prices high and stoking demand with new features. This time around, we will be paying less – much less – and getting more.

Apple unveils £100 3G iPhone

The next-generation iPhone will go on sale in the UK and US on July 11 and will feature faster web browsing and GPS

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Apple has, in effect, been forced to behave more like a traditional mobile phone company, allowing its device to be sold cheaply for the benefit of the network operators. Reports suggest that Apple may also get less of a cut from iPhone users’ monthly bills.

The balance of power has certainly shifted since the launch of the first iPhone, when mobile networks feared a mass stampede to whichever carrier got hold of the handset and willingly agreed to hand over their cash to Apple. With other manufacturers queuing up to offer iPhone rivals which offer similar features, albeit without all the glitz, Apple is no longer in a position to dictate terms. Its second-generation iPhone is a stronger product, but a weaker bargaining chip.

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