There’s already been speculation on the US side that AT&T (NYSE: T) will subsidize the iPhone in order to boost sales. In early May, Sanford C. Bernstein analyst Toni Sacconaghi wrote in a research note that Apple (NSDQ: AAPL) could easily double iPhone sales with a $200 subsidy. Now rumors of a subsidy have crossed the Atlantic, where UBS analysts say that the new iPhone could be priced across Europe for as low as 99 euros ($154) in order to drive sales, according to the Timesonline.co.uk. The newspaper is also reporting that the new iPhone will be available in the UK as early as July 9, where it will more likely be priced at £100 ($197).

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European sales of the iPhone haven’t exactly broken any records. By the end of last year, sales in Britain, Germany and France, where Apple had exclusive deals with O2 and Orange, sold 330,000 phones, nearly half of what industry insiders had forecast—from 500,000-600,000 units. Apple, meanwhile, is hoping to reach 10 million in sales by the end of the year, and has about 8 million units to flog to hit that target. In recent weeks, a flurry of distribution deals have been announced—many of them non-exclusive—with the iPhone to be sold everywhere from South America to Southeast Asia.

Should Apple give the go ahead to operators to subsidize the handsets, it will be interesting to see how the Apple brand holds up and if the iPhone loses any of its luster. In his note, Sacconaghi noted Motorola’s (NYSE: MOT) decision to cut the price of the Razr—when it was riding high as a hot model—from $500 to $150 doubled sales for the handset maker, and doubled again when Moto dropped the Razr to $100. Of course, the iPhone is no Razr, but once Motorola slashed prices, the Razr quickly lost its high-end sheen becoming just another commodity, while lower priced lookalikes from Samsung and LG (SEO: 066570) quickly turned consumer heads, gutting Razr sales in a matter of quarters.