SAN FRANCISCO June 10, 2008- With satellite navigation support and faster Internet access, Apple’s new iPhone will soon be $200 cheaper; however, most of these savings seem to be erased by the higher monthly service charges.

The new 8GB version with the latest features will go on sale July 11, for $199 and a 16GB version will cost $299 as announced by the Cupertino-based company.

According to AT&T spokesperson, Michael Coe, current iPhone users who purchase a new version and sign up for a new contract with AT&T will not pay any penalties to get out of their existing contract. And any person who has purchased an iPhone from an AT&T store after May 26 can return it before Aug.

Now its Apple’s strategy to make difference in sales proceeds through volume and with grants to the wireless carriers.

Apple is drawing out some revenue-sharing arrangements with some wireless carriers to change pricing strategies and this move is to free the carries to put higher prices for the service.

Initially, the new iPhones will be introduced in 22 countries and it has been designed to go over 3G or third generation with built-in global positioning technology.

The new versions will support Exchange software of Microsoft Corp. and this shift will put iPhone is a straight competition with RIM’s BlackBerry and Treo smart phones of Palm Inc.

According to Apple’s CEO Steve Jobs, more than 6 million iPhones have been sold since the launch of the first model a year back and almost 700,000 since March 08.In the fourth quarter of the last year customers waited for the 3rd –Gen model and steady slowdown in sales started at that point.