Apple CEO Steve Jobs has finally ended months of speculation by announcing the 3G iPhone during his keynote speech at WWDC in San Francisco.

Mobile can reveal that O2 and Carphone Warehouse have retained the exclusive distribution rights for the device, which will be available in the UK from next month.

The new 3G iPhone will be subsidised by O2 to make the device more attractive to customers and help achieve Apple’s target to sell 10 million iPhones worldwide by the end of this year.

The subsidy has been made possible because Apple has decided to sell the latest version with a more conventional – and consumer friendly – sales model.

Under the previous deal, O2 were obliged to give Apple around 35% of all revenue gained from tariffs. However, this time O2 will buy the device from Apple at a set price and can keep all tariff revenue, making it possible to subsidise.

It is thought that the handset will be available for free on O2 tariffs from around £70 per month and will cost less than the last versions’ launch price of £269 on lower tariffs.