Apple Inc. said Wednesday it is slicing the price of the iPhone by $200.

    The 8GB phone will now cost $399, down from $599. The $499 4GB model will be discontinued.

    Apple, which also revealed new models of its popular iPod music player that have iPhone-like features including Wi-Fi, said it is on pace to sell 1 million iPhones by the end of the month. The device was released to much hype at the end of June.

    The aggressive price cut didn’t sit well with Wall Street. Apple shares dropped 7.4 percent on Wednesday to $136.76.