Rumor: Wal-Mart to sell 4GB iPhone for $99
A new rumor presents the possibility that discount chain Wal-Mart may carry a special run 4GB iPhone 3G as part of its agreement to begin selling the touchscreen handsets later this month.
Apple's existing iPhone 3G product line includes 8GB and 16GB models, which sell for $199 and $299, respectively, with two year contracts. A 4GB first-generation iPhone was briefly available last year for $399 but was discontinued only a couple of months later when the company restructured its offerings to focus on a reduced 8GB model in an effort to boost sales.
In a report Thursday, the BoyGeniusReport cites unfamiliar sources who say Apple may be prepared to introduce a 4GB iPhone 3G that it would allow Wal-Mart to sell for $99 alongside two-year contracts. The blog is unsure of its sources, however, and asks that readers "Just don’t hate us if this doesn’t happen, we warned you."
Last month, BGR cited an internal memo announcing "that Wal-Mart has reached agreement with Apple to offer iPhone 3G in Wal-Mart and Wal-Mart-managed Sam’s Club Connection Centers nationwide beginning December 28, 2008."
In total, approximately 2,500 Wal-Mart locations and 69 Sam’s Club locations that use the discount chain's ordering system are expected to carry the device. Training for Wal-Mart employees is believed to have already begun.
For their part, Wall Street analysts have recently issued reports supporting the theory of deeper-discounted iPhones in the near future.
Last month JRPG Research analyst Jamie Townsend said he expects Apple will be one of several smartphone vendors that will ramp up competition in the smartphone market by discounting their excess inventories immediately following the Christmas holiday.
Separately, Needham & Co. analyst Charles Wolf argued in an October report that Apple's strong real-world revenues and its high iPhone gross margins give the company substantial headroom to market a $99 iPhone that could lead to huge strides forward in market share.
Apple's existing iPhone 3G product line includes 8GB and 16GB models, which sell for $199 and $299, respectively, with two year contracts. A 4GB first-generation iPhone was briefly available last year for $399 but was discontinued only a couple of months later when the company restructured its offerings to focus on a reduced 8GB model in an effort to boost sales.
In a report Thursday, the BoyGeniusReport cites unfamiliar sources who say Apple may be prepared to introduce a 4GB iPhone 3G that it would allow Wal-Mart to sell for $99 alongside two-year contracts. The blog is unsure of its sources, however, and asks that readers "Just don’t hate us if this doesn’t happen, we warned you."
Last month, BGR cited an internal memo announcing "that Wal-Mart has reached agreement with Apple to offer iPhone 3G in Wal-Mart and Wal-Mart-managed Sam’s Club Connection Centers nationwide beginning December 28, 2008."
In total, approximately 2,500 Wal-Mart locations and 69 Sam’s Club locations that use the discount chain's ordering system are expected to carry the device. Training for Wal-Mart employees is believed to have already begun.
For their part, Wall Street analysts have recently issued reports supporting the theory of deeper-discounted iPhones in the near future.
Last month JRPG Research analyst Jamie Townsend said he expects Apple will be one of several smartphone vendors that will ramp up competition in the smartphone market by discounting their excess inventories immediately following the Christmas holiday.
Separately, Needham & Co. analyst Charles Wolf argued in an October report that Apple's strong real-world revenues and its high iPhone gross margins give the company substantial headroom to market a $99 iPhone that could lead to huge strides forward in market share.
Comments
- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.
This is never giong to happen.
There's no way Apple will make a 4 GB iPhone for Walmart. Here's why:
- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.
This is never giong to happen.
Yup- the Trailer Park Special Edition.
The RAZR started its life as a premium product. The original packaging was a work of art and the RAZR v1.0 was very nicely put together.
As time went on, the price was cut again and again. The packaging was streamlined and several metal parts were replaced with plastic parts in the name of cost saving.
Each price cut meant that a larger demongraphic of people could afford the phone. What started life as a premium geek phone ended up being one of the biggest selling phones of all time. The change was remarkable.
Unfortunately Motorola couldn't repeat or sustain this success. Judging by the iPod, Apple will do a lot better.
The iPhone is quickly turning into the RAZR.
The RAZR started its life as a premium product. The original packaging was a work of art and the RAZR v1.0 was very nicely put together.
As time went on, the price was cut again and again. The packaging was streamlined and several metal parts were replaced with plastic parts in the name of cost saving.
Each price cut meant that a larger demongraphic of people could afford the phone. What started life as a premium geek phone ended up being one of the biggest selling phones of all time. The change was remarkable.
Unfortunately Motorola couldn't repeat or sustain this success. Judging by the iPod, Apple will do a lot better.
Price cutting will harm it rather than help it- like the Razr. The cutting edge geeks will no longer want the gadget that the masses have. It sounds like you're contradicting yourself.
There's no way Apple will make a 4 GB iPhone for Walmart. Here's why:
- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.
This is never going to happen.
I agree with you on this. My reasons are similar to yours. If anything they would release a 32GB model and the 8GB would become $99 (available at all retail locations), they will never release a 4GB again. Also, walmart just doesn't seem to fit the apple style. Best Buy is at least a tech type store.
LOL, the elitist don't want their toy sold at Wal-mart.
Maybe investors don't want to see a brand devalued.
PLACE is one of the 4 Ps that form the backbone of a marketing plan.
Maybe you think Apple hasn't done well with their marketing?
I agree with you on this. My reasons are similar to yours. If anything they would release a 32GB model and the 8GB would become $99 (available at all retail locations), they will never release a 4GB again. Also, walmart just doesn't seem to fit the apple style. Best Buy is at least a tech type store.
Agree with that. One thing though... people keep referring to the 'elitist' factor. Why is that a selling point? I don't question anybody's desire for a great phone but I have to admit I question the concept of an elitist phone. To aspire to elitism is pretty low, in my view. If you (not you, necessarily, dizzy13) are so desperate to outwardly express your own sense of bling bling and / or taste (not) supremacy over the 'common man', just get one of those diamond studded leather cases. Or better still, have one made.
Price cutting will harm it rather than help it- like the Razr. The cutting edge geeks will no longer want the gadget that the masses have. It sounds like you're contradicting yourself.
As long as you can save costs (cheaper packaging, cheaper parts, economies of scale), the mass market is where you want your product to be. Getting cutting edge geeks on board at the start of the product lifecycle is good because they'll pay a premium for the product, blog about it and generally put up with more faults. As a product matures, it makes perfect sense to move away from that demographic.
Again, look at the iPod. Remember how many accessories you used to get with it and how cool the packaging used to be? Now it's a mass market product that might not appeal to so many cutting edge geeks.
There's no way Apple will make a 4 GB iPhone for Walmart. Here's why:
- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
U2 iPod. There were four other bands that had special editions a year or two before that. It was a little known release that was actually an official Apple product, not to be confused with other companies making their own engravings to iPods, unfortunately, those things are polluting my searches so I can't find the real Apple ones.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
Few wanted it at $499. I imagine at $99 it would be a it. But I do agree that it's not likely.
There's no way Apple will make a 4 GB iPhone for Walmart. Here's why:
- Apple never makes special editions of anything. The closest thing they have is a (RED) iPod they sell exclusively at Apple.
- They discontinued the original 4 GB iPhone because no one wanted it. Even then, Jobs said no one wanted a phone that small. And now, compared with the rest of the iPhone/iPod lineup, 4GB stacks up even worse.
- While I agree $99 is a great price point, I sincerely doubt Apple's going to hand special pricing to a single retailer, let alone Walmart of all people.
This is never giong to happen.
I doubt it. The plan is the killer. They need a cheaper plan for the Wal Mart Clientele, which is pretty much dependant on AT and T. If Apple sells it, it would be regular price minus $10 (max).
I'm torn on this. You both make solid arguments as to the pros and cons. Keeping it at 4GB for Walmart does set it apart from the 8 and 16GB models, but the previous lack of sales for the 4GB model does make me question the idea, even as a rumour. However, in this economy and for the Walmart customer this may look good. I use about 6GB on my 16GB iPhone and I have videos that I have DLed from YouTube using KeepVid, so perhaps this would suffice many people new to smartphones and get them to upgrade to higher capacity iPhones in the future. Especially now that their are many new touchscreen phones competing directly now.
As for the price point, the cost of 4GB v. 8GB NAND is close enough that Apple isn't making as much per handset but volume sales can account for that. The other issue is the $70 per month (not including tax) charge that people will have to pay to use the device. Are Walmart customers really going to be okay with $99 now and then $80/month for 24 months, but weren't at $200 now and then $80/month for 24 months? Which no includes text messages.
Wasn't there a rumor a short time ago discussing Pay-as-you-Go pricing plans for the iPhone?? Walmart and Pay-as-you-Go phone plans go well together...
This is the only way I can see this working, but from what I've read about the sales I don't think the iPhone is ready for this type of market change.
I agree with you on this. My reasons are similar to yours. If anything they would release a 32GB model and the 8GB would become $99 (available at all retail locations),
From what I can see, I think the 32GB NAND is still too expensive to replace the 16GB iPhone at that price point.
they will never release a 4GB again. Also, walmart just doesn't seem to fit the apple style. Best Buy is at least a tech type store.
I don't think so either, but perhaps this could work in the future if they release the old style body at Walmart for a lower price point. For example, when we get a new model in the summer the old one, instead of being dropped completely, could be sold as a discount device. Apple and AT&T still gets their profits from the old model now being a commodity item, while the new model still gets to live on as an elitist device. If Apple thinks it can sell more without hurting future sales by destroying the brand they will do it. They are just as greedy and for profit as the next company.
As long as you can save costs (cheaper packaging, cheaper parts, economies of scale), the mass market is where you want your product to be. Getting cutting edge geeks on board at the start of the product lifecycle is good because they'll pay a premium for the product, blog about it and generally put up with more faults. As a product matures, it makes perfect sense to move away from that demographic.
Again, look at the iPod. Remember how many accessories you used to get with it and how cool the packaging used to be? Now it's a mass market product that might not appeal to so many cutting edge geeks.
But the iPod was never priced cheap-reduced to $99. And it really had no competion at all for years- if ever. The phone market is much more trendy and fickle- what is hot changes very fast.
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But the iPod was never priced cheap-reduced to $99. And it really had no competion at all for years- if ever. The phone market is much more trendy and fickle- what is hot changes very fast.
The iPod range starts at $49...
And the unsubsidised price of that 4GB iPhone will be a lot higher than $99.
The iPod range starts at $49...
And the unsubsidised price of that 4GB iPhone will be a lot higher than $99.
Come on now- you know that's not a comparison. We're talking the same iPhone for $99- a $49 shuffle is not the same as a full iPod.