• The Wall Street Journal, Thursday, September 6, 2007 11:45 AM

Apple yesterday cut the top price of its month-old iPhone from $599 to $399, leading to speculation that sales had not been as strong as anticipated. But CEO Steve Jobs says that the "aggressive" move is timed to take advantage of the holiday shopping season.

Apple also says it will stop selling a $499 low-end model of the iPhone that came with 4 gigabytes of storage because most of its customers were buying the higher-end model with twice the capacity. Also yesterday, Apple introduced a new iPod that will let users directly purchase songs wirelessly over the Internet, making a computer unnecessary. The product has the same touch-screen technology as the Apple cell phone and can connect to the Internet over Wi-Fi.

A spokesman for AT&T, Apple's wireless partner for the iPhone in the U.S., says the company has been happy with sales thus far and welcomes Apple's decision to lower the price. Apple's shares shed $7.40--or 5.1%--on the news, falling to $136.76 in 4 p.m. trading on the Nasdaq Stock Market.

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