Apple is in discussions with Orange about lowering the cost of the French iPhone, Les Echos reports. The newspaper cites an inside source, who claims that Apple is putting pressure on Orange to change to a subsidized pricing model, under which the public would have to pay less for the device. At present Orange is charging at least €399 ($635), making not only for an expensive product, but one of the most costly versions of the iPhone in Europe.

Apple is said to be disappointed with sales of the iPhone in France, which recently crossed the 100,000 threshold, and in Europe in general. This is likely one of the reasons for price cuts elsewhere, which have seen the 8GB iPhone fall to £169 in the UK, and just €99 in Germany. Apple may also be hoping to clear out inventory in advance of a 3G iPhone release this summer.

Orange is said to be willing to go along with Apple's plan, but negotiating for a better revenue-sharing agreement in order to compensate for lower profits on each iPhone sold.