Apple on Monday sought to boost the limited appeal of its acclaimed, but modestly selling, iPhone as it announced that new models would sell for as little as half the price of the first version.

The drastic cuts, which will bring the price of an 8-gigabyte model down to $199 and a 16GB version to $299, largely reflect subsidies from mobile operators who hope to make money from selling data services with the handsets, according to people familiar with the arrangements.