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Wal-Mart starts carrying Apple iPhone - minus any discount

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When it was rumored that Wal-Mart Stores, Inc. (NYSE: WMT) would carry the Apple, Inc. (NASDAQ: AAPL) iPhone 3G last month, many of us wondered what pricing the world's largest retailer would give the benevolent wireless handset. It's here now, as Wal-Mart confirmed at the end of last week that it would indeed be carrying the iPhone 3G as of yesterday in 2,500 stores in the U.S.

The price? Just a drop below normal $199 and $299 pricing. Wal-Mart is now selling the 8GB iPhone for $197 and the 16GB version for $297. For some reason, Wal-Mart whacks a few dollars off the price and thinks it has a pricing advantage. Not. Apple relented and allowed the retailer to take its usual "price ending in XX7" approach but apparently did not allow any discount on the iPhone beyond that. No lower priced handset, not a 4GB model for $99 that had been rumored. Nothing new really.

Except -- the iPhone will now be in front of the largest retailer audience in the U.S. That makes a huge difference for Apple. Pundits, myself included, have always thought brands cheapened themselves by selling in Wal-Mart. Does Apple cheapen itself by going into the largest discount retailer in the world? The iPhone and iPhone 3G have been around now for over 18 months and have sold in huge numbers, so I doubt it. The exclusivity factor of just being carried by AT&T has worn off, as has the novelty of the iPhone itself (it's no longer exclusive -- you see them everywhere). Assuming many Wal-Mart shoppers can pass credit checks, the iPhone 3G may find a whole new audience now.

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Last updated: November 26, 2009: 02:35 AM

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