Wal-Mart to sell iPhones – Apple looks for increased revenue

Thursday, December 18, 2008, 12:21
Cell Phones
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Wal-Mart has been the center of speculation off late. There has been news of Wal-Mart showing inclination toward selling the iPhone. Speculation surrounding Wal-Mart carrying the iPhone substantiated on Wednesday this week, with a leaked memo saying that the retailer would start selling the iPhone from Dec. 28.

The memo was published on Engadget. The published memo states that an 8G-byte iPhone 3G will be priced at US$197, and a 16G-byte iPhone at $297, with a two-year cell phone contract with AT&T. The higher prices of the phone could come as a disappointment as speculation last month suggested Wal-Mart would sell a 4G-byte iPhone 3G for $99. The authenticity of the memo is yet to be established by Wal-Mart officials. A Wal-Mart spokesman said “We’ve made no official announcement on the iPhone.” There was no comment from the side of Apple as well.

Wal-Mart and Apple’s iPhone is a good match, said Jack Gold, principal analyst at J. Gold Associates. In addition to increasing mobile revenue, Apple is looking forward to increasing revenue from the iTunes music store and Application Store. In order to achieve this, Apple has to sell more phones. Apple wanted to target a distributor with large number of discount stores in and around US. Wal-Mart, which has thousands of large and discount stores in the U.S., will help Apple realize its plans. Through its “Apple Retail Stores”, retail stores and carriers worldwide, Apple has already sold millions of iPhones.

“Wal-Mart will provide Apple access to a conservative-spending audience that would not readily visit an Apple store or otherwise spend wads of cash on a smart phone.” Gold said. “It wouldn’t surprise me to see Wal-Mart carry the iPhone, the question is which one. An iPhone priced in the $99 range would sell well at Wal-Mart” Gold said.

An important point to be noted is that iPhone could face competition from T-Mobile’s G1 touch-screen phone that includes Google’s Android platform. Wal-Mart started selling T-Mobile’s G1 touch-screen phone in November. However, the G1 has a different interface and isn’t as renowned as the iPhone.

“One reason people buy iPhone is because it’s Apple. It has to be wonderful,” Gold said.