NEW YORK - AT&T Inc said it will halve the price of the existing iPhone from Apple Inc starting on Monday evening and start selling a new version of the phone on June 19 without impacting its profit targets.

The exclusive U.S. service provider for iPhone said its costs to sell the newly announced iPhone 3G S would be similar to those for the original 3G iPhone, which pressured its profits last year.

But unlike when it announced the first 3G iPhone last year, AT&T said it was sticking by its target for wireless margins in the low 40 percent range based on operating income before depreciation and amortization.

On June 19 AT&T said it will sell the new iPhone 3G S for $199 for versions with 16 gigabytes of storage space, and $299 for a 32-gigabyte model for customers who commit to a 2-year service plan.

The new iPhone 3G S will allow Web surfing at twice the speed of today's iPhone and have a 3 megapixel camera that can record video, according to Apple.

AT&T shares fell 10 cents to $24.46 on New York Stock Exchange shortly before the close of trading. (Reporting by Sinead Carew; Editing by Richard Chang)

Electronics Apple inc. Target Iphone