Wal-Mart cuts iPhone 3GS price to $97

Beats Apple to a price cut for 2009's iPhone as new model looms

Wal-Mart today dropped the price of Apple's 16GB iPhone 3GS by $100, to $97, according to the retailer's Web site.

Multiple reports, including ones from the Associated Press and the Wall Street Journal, had said that the giant retailer's new price would go into effect Tuesday and run indefinitely. As with all iPhones, customers buying the lower-priced 3GS must commit to a two-year contract with AT&T.

Wal-Mart's Web site listed the new price at 6 a.m. Eastern time today. At 2 a.m. Eastern time, the site had still listed the 16GB iPhone 3GS at $197, a $2 savings over Apple's and AT&T's $199.

Wal-Mart was not available for comment late Monday.

The move will likely be seen as the best evidence yet that Apple CEO Steve Jobs will unveil the next iPhone June 7, the opening day of the company's annual Worldwide Developers Conference (WWDC).

It's unknown when Apple would start selling the next-generation iPhone. However, if it sticks to last year's timetable, Apple will launch the newest model of its smartphone on Friday, June 18.

Although Wal-Mart's timing may be unexpected, the price cut is not: When Apple introduced the iPhone 3GS in early June 2009, it immediately slashed the price of the previous model, the entry-level 8GB iPhone 3G, to $99. Apple and AT&T continue to sell the iPhone 3G at that price.

Most analysts expect that Apple will repeat the move this year: When it unveils the new model, Apple will drop the price of the iPhone 3GS to $99. If so, Wal-Mart would retain its current $2 price advantage over Apple and AT&T.

Rumors that bolstered that speculation hit several Apple and technology blogs earlier Monday. The Boy Genius Report, for example, claimed that its sources said that Apple had stopped shipping the 8GB iPhone 3G to AT&T stores and that further production orders for the 2008-era smartphone would not be placed.

The disappearance of the iPhone 3G makes sense, not only because it makes way for a cut-rate iPhone 3GS, but also because the older model is not able to multitask -- the flashiest new capability in iPhone OS 4, the mobile operating system upgrade that Apple previewed last March and promised to release this summer.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@ix.netcom.com.

Copyright © 2010 IDG Communications, Inc.

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