Wal-Mart will put the iPhone lineup on sale in their retail stores on Sunday. The phones will not be priced as low as many observers had hoped, but they will be sold at less that the normal Apple retail price.
Wal-Mart, the world’s largest retailer, will be the second independent seller (after Best buy) to sell the popular, upscale Apple cell phone. Until recently, it had only been available from Apple or from AT&T, who provides the cellular network for the phone. Both phones in the iPhone lineup will be available at Wal-Mart at a $2 discount: the 8GB model will sell for $197 and the 16GB will sell for $297, according to Reuters. Best Buy is selling the phones with a $9 discount per phone.
Just like phones purchased at any other outlet, the user will need to sign up for a new two-year service agreement (or a qualified upgrade) with cellular service provider AT&T. All of the old rules apply to the new seller. However, Apple sees the Wal-Mart outlet as letting them reach a group of new consumers that they were not reaching before: lower income bargain shoppers. No retailer is more efficient at reaching this group of shoppers than Wal-Mart, even if those shoppers have not previously been in Apple’s target market.
Wal-Mart is expert at reaching shoppers looking for a bargain. There was some speculations that Wal-Mart would be offering a 4GB model of the iPhone for the discount price of $99, but this appear not to be the case at this point. Still, the Wal-Mart deal could apply a lot of pressure to Best-Buy, the only other pure retailer of the phone. Wal-Mart has many times the number of retail outlets of Best Buy and therefore reaches a much wider audience. Wal-Mart was one of the rare retailers to report a positive holiday shopping season.
It will be interesting to see what happens in the coming months. If the iPhone does well at Wal-Mart, can the MacBook be far behind? Apple is showing staying power in both the computer and consumer electronics marketplaces; Wal-mart is showing good retail performance in the face of a very negative economy. It might be a different-sides-of-the-tracks marriage made in heaven.