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The iPhone - yours for €1

But you'll have to speak German

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Germany's T-Mobile is to sell Apple's new 3G iPhone for as little as €1.

The normal price for the 8 gigabyte version of the 3G iPhone is €169.95, depending on the rate plan.

T-Mobile is only offering the €1 iPhone with a monthly subscription of €59.95. The 16GB version will be priced from €19.95 to €249.95.

In the past Apple prohibited the practice of subsidized iPhone pricing, mainly to avoid reducing the perceived value of the phone.

O2, which carries the phone in the UK, announced last week that the iPhone would be free for customers who sign up for one of its higher monthly tariff plans.

There is little potential for buying these phones, unlocking them and using them on other networks in other countries as buyers won’t be able to break the two-year contract.

In April T-Mobile Germany introduced a considerable price cut for the first generation iPhone. The price dropped to €99, partly because the iPhone so far hasn't been doing too well in Germany. T-Mobile Germany sold about 70,000 iPhones in its 11 weeks of sales. The cost of the phone has been a significant barrier in Europe so far.

T-Mobile will also start selling the new iPhone in Austria and the Netherlands, and later this year in Croatia, the Czech Republic, Hungary, Poland and Slovakia. However, tariffs in these countries haven't been announced yet.

Meanwhile, Vodafone Italy has announced its 3G iPhone prepaid prices. The 8GB version will retail for €499 and the 16GB 3G iPhone for €569. ®

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