AFAIK just about any router should be compatible with the iPhone.
If you want to go ultra-cheap, you can try the Netgear WGR614 for about 1.6k.
If you need something better, give the Buffalo WHR-G125 a shot for about 1.8k.
There's a Linksys model selling for slightly more than 2k, though I dont specifically know which model it is.
P.s: These are street prices in Chennai