When Steve Jobs, the chief executive of Apple, unveils the next-generation iPhone at the company's Worldwide Developers' Conference in San Francisco today, he is expected to reveal a new business model.

The change in strategy frees operators to subsidise the phone as much as they like. In Britain, where O2 has an exclusive contract with Apple, customers on the most expensive 18-month tariffs will be given the handset for free.

Mr Jobs is doing this in the knowledge that the handset market has become more competitive since iPhone was launched.

In addition, Apple has had disappointing iPhone sales in Europe, where phones are widely subsidised. Jupiter Research estimates that of five million handsets sold, fewer than 350,000 were shifted in Europe.

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Apple has barely taken a bite out of a global market of more than one billion handsets, of which Nokia sold 437 million units last year. Cutting the price and ending exclusivity will help Apple to meet its target of selling ten million iPhones by the end of the year.

Apple's original strategy gave the company an estimated 15 per cent of the operator's average revenue per user.

Under the new model, with operators forking out to cover a proportion of the cost of the phone, Apple will take a smaller share of that revenue.

Instead, analysts predict that Apple will aim to exert control over the software developer's space by taking a cut of applications sold through the handset.

Ben Wood, an analyst for CCS Insight, predicts that the new iPhone will have a blue button that will link to Apple's online store, where customers can buy games, ring-tones and other software programmes. He said: “We predict this will become the most popular mobile application store ever launched.”

The new iPhone is widely predicted to connect to third-generation (3G) networks, giving faster internet surfing and download speeds.

Market-watchers say that the key change is making the phone a software platform. Michael Gartenberg, an analyst for Jupiter Research, said: “Starting Monday, the iPhone is now a full software platform as well. That's super important, because it means developers will take the iPod and the iPhone places that Apple alone could not, that no individual company could.”

Apple and O2 declined to comment.

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