Walmart began selling Apple's iPhone 3G at nearly 2,500 of its stores on Sunday. The news came just before AT&T announced Monday that it will sell refurbished iPhone 3Gs for just $99.
Walmart is offering the black 8GB iPhone 3G for $197 and the 16GB black or white model for $297. Those prices are contingent on a new two-year service agreement -- or a qualified upgrade -- from AT&T.
"We are delighted to bring customers this groundbreaking mobile technology," said Gary Severson, senior vice president of entertainment for Walmart stores. "Our electronics associates have been preparing for many weeks for the arrival of iPhone 3G. We are excited to now help new customers learn more about the features and services that make the iPhone unique."
A New Distribution Opportunity
Like the iPhone 3Gs sold through AT&T, Walmart is offering the latest model that combines all the features of the iPhone plus 3G networking, built-in GPS for expanded location-based mobile services, and iPhone 2.2 software with support for Microsoft Exchange ActiveSync and the ability to run more than 10,000 third-party applications available through the App Store.
"You can't discount the fact that the iPhone is now sold at Walmart," said Michael Gartenberg, vice president of mobile strategy for Jupitermedia. "The breadth and distribution reach of Walmart is so incredibly important that this might become one of the more interesting parts of the story in terms of long-term retail distribution for the iPhone. Getting yourself into that Walmart space is very significant, even if you are only talking about essentially a $2 discount."
Walmart is doing more than selling brand-new iPhones for the cheapest price on the market. It also offers a price-match policy that allows stores to match the price of any local competitor's advertised price. It seems Walmart will not be undersold on the iPhone -- except maybe by AT&T with its refurbished $99 8GB model.
Breaking the Price Barrier
With the $99 price, Gartenberg said Apple has crossed a psychological barrier with the iPhone. Even though the $99 iPhone is refurbished, such products are heavily tested.
Gartenberg said there should be very little hesitation on the part of the consumer looking to save $100 by opting for a refurbished iPhone 3G. Still, some may want a sparkling new iPhone right out of the manufacturer's original box and others may not know they have a choice.
"The moniker of being refurbished is going to put some people off," Gartenberg said. "You have to know that these things even exist. This is not something AT&T is going to go out of their way to tell people about, and it's not exactly something most people might come across in the course of making a phone purchase."