Apple’s iPhone 3G Coming to Walmart Stores; But Unlikely for $99

Posted by iPhoneHacks on Dec 09, 2008 | No Comments »

Walmart might not sell a 4GB iPhone model for only $99

Boy Genius had claimed last week that Apple might sell a 4GB iPhone model at Walmart Stores for $99.

Based on the training materials and advertising which Mac Rumors received and Mercury News which cites Walmart employees, it looks like Apple will be selling its iPhone 3G at Walmart Stores from December 28th but it seems to be very unlikely that they will sell it for $99.

Based on the advertisement that Mac Rumors has received, there is no information to indicate that Apple will sell iPhone 3G for $99, it only lists 8GB iPhones for sale at $197.

Analyst Maynard J. Um, writing in a research note for UBS had this to say:

"A $99 iPhone would be atypical of Apple’s premium brand strategy ($149 seems more logical if a 4GB model were introduced). More likely is a scenario in which select Wal-Mart (& possibly Sam’s Clubs) are simply added as further iPhone distribution points (like the Best Buy announcement).”

Additionally he believed that a 4GB would likely cannibalize sales of the 8 GB and 16 GB iPhones.

Over at Barclays, analyst Ben Reitzes also believes rumors of a $99 iPhone model will prove inaccurate.

"It is not like Apple to offer one special SKU for one non-Apple retailer, confusing views on pricing and driving traffic away from its own stores. We believe it is more likely Apple will allow Wal-Mart to sell existing SKU’s at prices it desires (likely a small discount)."

This also seems to concur with the advertisement that Mac Rumors received.

Folks at Wired believe that its highly unlikely for Apple to sell a $99 iPhone model simply because the iPhone is currently unstoppable based on Apple's fourth quarter results where 6.9 million iPhones were sold and because Apple does not sell cheap and the more compelling reason is that Apple discontinued the 4GB iPhone model because the sales were slow as compared to the 8 GB model.

I don't agree with the explanation that Apple will not sell an iPhone for $99 because "The company just doesn't do cheap", the mobile phone business model is completely different from Apple's Mac or iPod business. In case of mobile phones, the price is heavily subsidized by the carrier.

But I agree with Barclays, analyst Ben Reitzes, if Apple was to ever sell an iPhone 3G for $99 it will not be just at Walmart but also at Best Buy, AT&T stores and its own Apple stores.

What do you think?

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