A New York woman is suing Apple for lopping $200 off the price of the iPhone.

Dongmei Li of Queens, says Apple violated price discrimination laws when it slashed the price of the 8-gigabyte iPhone by a third, from $599 to $399, within two months of the gadget's June debut. Hundreds of early customers who paid full price didn't expect a reduction so soon and complained.

Apple said sorry and under its return policy, Apple refunded the $200 difference for those who bought the phone within 14 days of the reduction. It also offered a $100 credit at Apple stores for early adopters.

Li said that early purchasers like herself could not resell the product for the same profit as those who bought the mobile phone following the price cut. She bought a 4GB iPhone for $499 and alleged that owners of the 4GB model were given less favourable terms than those who bought the 8GB model at the premium price.