Monday, December 8, 2008

Apple to Sell IPhones in Wal-Mart Stores This Month

Dec. 7 -- Wal-Mart Stores Inc. will become the second mass-market retail chain to start selling Apple Inc.’s iPhone, with two store representatives saying the world’s largest retailer will carry two models of the Web-surfing handset this month.

Employees in the cell-phone departments at five California stores, contacted by phone today, said Wal-Mart will offer iPhones by the end of December. Employees are currently being trained on how to sell the device, all five said.

Apple Chief Executive Officer Steve Jobs tapped Best Buy Co., the largest U.S. electronics retailer, in September to sell the device as he works to win more buyers. Before then, the iPhone had been sold only by Apple and AT&T Inc., the exclusive provider of wireless service for the phone in the U.S.

Analysts say Apple may offer a discontinued 4-gigabyte version through Bentonville, Arkansas-based Wal-Mart and sell it for $99. Apple currently sells two models at $199 and $299.

“A $99, Apple-branded cell phone is inevitable,” said Shaw Wu, an analyst for Kaufman Brothers in San Francisco. “One of the key things Apple needs to do to drive broader iPhone adoption is to build a more complete product line” with low- end, mid-range and high-end products, Wu said in a Dec. 5 note.

Apple spokesman Steve Dowling wouldn’t respond to the report and said the company “does not comment on rumor or speculation.” Wal-Mart spokesman Dan Fogleman said the company hasn’t made an official announcement on an iPhone offering and has no comment. AT&T spokesman Mark Siegel declined to comment.

Faster, Cheaper

Jobs told analysts in October that Apple has sold 10 million iPhones this year, meeting his forecast to capture a 1 percent share of the worldwide mobile-phone market.

To spur adoption of the device, which was originally released in June 2007, Apple added a speedier version that works on third-generation handsets in July, dropped the price to as low as $199 from $399 and expanded distribution to 51 countries. Jobs said he expects the iPhone 3G to be sold in 70 markets by year’s end.

A store representative in Yuba City, California, who declined to give his full name, said six employees will be going through training this week on how to sell two iPhone models. He said employees haven’t been told pricing or which versions Wal- Mart will sell, and said the store may have them in stock the day before Christmas.

Media Player

A clerk in Stockton, California, who didn’t want to provide his full name, said he was told iPhones would be available around Dec. 15. Two additional store representatives, who also asked not be named, said the outlets in Sacramento and Marysville, California, would have iPhones in stock between Christmas and the New Year.

Apple, AT&T and Best Buy currently sell 8-gigabyte and 16- gigabyte models of the iPhone, which combines a handset with Apple’s iPod digital media player. Apple stopped selling a 4- gigabyte model in September 2007 after Jobs said customers preferred versions with larger storage capacity.

A clerk at a Wal-Mart store in Vacaville, California, said the store will sell the 8- and 16-gigabyte models at the same prices as AT&T, or $199 and $299, respectively. The person, who declined to give his name, said the phones will be available Dec. 28.

Apple, based in Cupertino, California, rose $2.59 to $94 on Dec. 5 in Nasdaq Stock Market trading. The shares have declined 53 percent this year.

The San Jose Mercury News reported the Wal-Mart deal yesterday, citing its own interviews with Wal-Mart employees.

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