Walmart represents 'mainstreamification' of iPhone

A lot has been made of Apple's seemingly sure move to Walmart as a point of sale for the iPhone.  Whether or not Apple releases an "everyman" $99 4Gb iPhone still remains to be seen, but this isn't the main point.  The macro trend, if you haven't recognized it yet, is that the iPhone has gone beyond mainstream. 

And the Apple brand?  Don't worry, it will be fine.  Walmart sells Coke and GE products, which are by some accounts the world's most valuable brands. They aren't suffering any dilution.

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Walmart also sells iPods – and has for awhile – without any backlash.  Heck, they may even start selling MacBooks.  Do they sell Louis Vuitton handbags? Nope. Different demographic. But they do sell Sony.

Apple is trying to push this phone beyond even the urban middle class.  The iPhone will now be in every small town in America.  Beyond even the reach of Best Buy and AT&T stores, Walmarts are, for better or for worse, where a huge swath of Americans from all income brackets do their weekly shopping.  The iPhone will be in front of every face, day after day, week after week.

Just like the iPod has been.

If there is a $99 version, this will tempt the lower income demographic a bit more, but the biggest expense – by a landslide – is the AT&T monthly fee.  In fact, on a few of AT&T's plans, the $99 will be eclipsed in the first month of wireless charges alone.  This, however, will sell many more phones and won't tarnish the brand.

Not everybody is as sure as I am that cheaper iPhones are a good idea.

UBS analyst Maynard Um said yesterday,

"A $99 iPhone would be atypical of Apple's premium brand strategy.  More likely is a scenario in which select Wal-Mart, and possibly Sam's Clubs, are simply added as further iPhone distribution points."

Really?  What would a $59 iPod do to the brand?

The most upset person is likely Steve Jobs, who doesn't seem like a Walmart kinda guy.  But considering the 4.5 million iPhones he could sell, it isn't really a decision at all, and he's made much more painful strategic moves in the past (selling part of Apple to Microsoft) that make this pale in comparison.

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