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Wal-Mart announces iPhone 3G availability at its stores

And there's no $99 model in sight

December 26, 2008 12:00 PM ET

Computerworld - Wal-Mart Stores Inc. on Friday confirmed that it would sell Apple Inc.'s iPhone starting Sunday, Dec. 28, but said it plans to price the devices just $2 under list.

The giant retailer will not sell a lower-priced iPhone for $99, as earlier rumors had maintained.

In a statement issued Friday, Wal-Mart said it would sell the 8GB iPhone for $197 and the 16GB iPhone for $297, just $2 off Apple's retail prices of $199 and $299, respectively. AT&T Inc., Apple's network partner in the U.S., sells the iPhone for the same $199 and $299 prices.

Customers must commit to a two-year contract with AT&T when purchasing an iPhone, as they are required to do when buying the device at other U.S. outlets, including Apple's own retail stores, as well as AT&T's and Best Buy Co.'s stores.

Wal-Mart's prices, though lower than Apple's or AT&T's, are higher than Best Buy's current sales prices. As of Friday, the electronics chain listed the 8GB iPhone for $189 and the 16GB model for $289, $10 off list price.

Perhaps expecting that, Wal-Mart said Friday that its price-matching policy applies to the iPhone. Stores will match the price of "any local competitor's advertised store price on the same item within the same promotional period," it said.

Two weeks ago, when Wal-Mart employees acknowledged that the retailer would start selling iPhones later in the month, talk of a $99 model also made the rounds of Apple-centric blogs and news sites. The low-priced iPhone was to be a 4GB model, a configuration that Apple has not sold for more than a year.

At the time, one analyst hedged his bets. Ezra Gottheil of Technology Business Research Inc. said then that although he had initially discounted the rumors, he also "would not rule out" a $99 iPhone, noting that Apple's carrier-subsidized income for the 8GB model was an estimated $587 and the California computer and consumer electronics maker could afford to push down prices if it wanted to.

The Wal-Mart move is the latest of several that Apple has made to expand its iPhone sales channel in the U.S. since early September, when Best Buy began selling the smart phone. Two weeks ago, AT&T resurrected online sales of the iPhone, allowing customers to purchase the phone online and then finalize the activation scheme at home via the Internet. Prior to AT&T's sales change, the iPhone had been unavailable for online purchase in the U.S. since Apple debuted the iPhone 3G last July.

Wal-Mart will sell the iPhone at special kiosks deployed in the home entertainment departments of about 2,500 of its approximately 3,500 U.S.-based stores.

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