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Walmart's launch-day discounts to offer Apple's iPhone 5c for $79, 5s for $189

post #1 of 62
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Those looking to pick up one of Apple's two new iPhones can save some money if they go to Walmart, as the retail giant is offering both devices at a discount from the time they launch.



Walmart will be offering 16GB models of both the iPhone 5c and the iPhone 5s at a discount, according to Cnet. The 16GB 5c will sell for $79, while the 16GB 5s will sell for $189, savings of $20 and $10, respectively.

The iPhone 5c will be available at the listed price beginning Friday, September 13, when preorders for the device begin. Customers must preorder at a physical Walmart location, though. Those orders will be filled on a first-come, first-served basis, and they must be picked up by September 25.

As there will be no preorder period for the iPhone 5s, customers will have to pick up that device in stores when it launches on September 20.

Pricing on both phones is contingent upon a customer signing up for a new, two-year contract with Verizon, AT&T, or Sprint. Customers waiting until Saturday, September 21, will also be able to take advantage of Walmart's new trade-in program. Depending on the condition of the device traded in, customers can receive up to $300 in store credit toward the purchase of a new smartphone. Those new phones will have to be activated in-store for Verizon, Sprint, AT&T, or Walmart's pre-paid wireless service.
post #2 of 62
Apple has really dropped the ball with this no-preorder business for the 5S.

They had better at least come out with a "Reserve for in-store pickup" option for launch day. If I'm forced to go to a store that day, I'm not fighting a crowd of walk-ups.
post #3 of 62
Quote:
Originally Posted by pmz View Post

Apple has really dropped the ball with this no-preorder business for the 5S.

They had better at least come out with a "Reserve for in-store pickup" option for launch day. If I'm forced to go to a store that day, I'm not fighting a crowd of walk-ups.

 

You could always wait a day or two...

post #4 of 62
AT lease the Chinese illegals and their cousins won't be in line here in NYC (I hope) now that China is to release on day one.
 
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post #5 of 62

This tells me one thing: The 5C has major price flexability.  Apple margins must be massive on this phone at $550.

 

I really think the unlocked price of the 5C is inflated.  I fully expect to see more of these 'deals' especially in China/India. 

post #6 of 62

$79 sounds a lot better than $99.

 

I think that $20 could make all the difference for the 5C.

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post #7 of 62
Quote:
Originally Posted by island hermit View Post
 

$79 sounds a lot better than $99.

 

I think that $20 could make all the difference for the 5C.

What it signals to me is that -- for the first time since the iPhone was introduced -- demand could be slightly soft.

 

I really, really hope I am wrong. We'll have an early sense tomorrow.

post #8 of 62
Quote:
Originally Posted by anantksundaram View Post

What it signals to me is that -- for the first time since the iPhone was introduced -- demand could be slightly soft.

I really, really hope I am wrong. We'll have an early sense tomorrow.

NO we won't because who in their right mind would upgrade from a 4S to a 5C?
 
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post #9 of 62
Originally Posted by pmz View Post
Apple has really dropped the ball with this no-preorder business for the 5S.

 

Yeah, no.

 
They had better at least come out with a "Reserve for in-store pickup" option for launch day.

 

Or what, you'll never buy from them again? They don't care.

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post #10 of 62
Quote:
Originally Posted by anantksundaram View Post

What it signals to me is that -- for the first time since the iPhone was introduced -- demand could be slightly soft.

I really, really hope I am wrong. We'll have an early sense tomorrow.

I think there's an increased demand, because for the first time the s version looks different from the previous version. The new color schemes on the 5s was a brilliant idea and I think the gold will be the option of choice.
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post #11 of 62
Quote:
Originally Posted by pmz View Post

Apple has really dropped the ball with this no-preorder business for the 5S.

They had better at least come out with a "Reserve for in-store pickup" option for launch day. If I'm forced to go to a store that day, I'm not fighting a crowd of walk-ups.

 

So, what if you wait a week or two - or even a month?  I seriously doubt that the quality of your life would even be infinitesimally reduced waiting a little longer.  It's just a phone for geez sakes. There's no 'win' for being the first on your block to have a 5C or 5S.  Do you not have a phone already, or a life?  I'm always flummoxed by those who are willing to call something a 'fail' because they might have to wait a couple of days, or even a few weeks for some new toy.   No consumer product is worth that sort of importance.

post #12 of 62
Quote:
Originally Posted by dasanman69 View Post


I think there's an increased demand, because for the first time the s version looks different from the previous version. The new color schemes on the 5s was a brilliant idea and I think the gold will be the option of choice.

 

Yes, true. Getting the gold one will show everybody that I have the latest version. This is the best one to get, or the space grey one - but people might not notice from a distance. Better get the gold. /s

post #13 of 62
The resellers are setting a lower "street" price by reducing their margins!

Apple'a margin as the manufacturer selling to resellers remains the same.

Likely, the Apple online and physical stores will match the street prices -- these stores are essentially resellers and have a different profit/margin objective than Apple, the manufacturer.

What interests me is if we will see the same kind of selling price elasticity by resellers for unlocked iPhones:
1) could we hit the so-called US $486 "sweet spot" price for China?
2) will there be a lessening dependency on subsidies?
3) if so, what will replace subsidies?

I see some interesting opportunities, here -- and most are good for Apple.
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post #14 of 62
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Originally Posted by andrewb123 View Post

Yes, true. Getting the gold one will show everybody that I have the latest version. This is the best one to get, or the space grey one - but people might not notice from a distance. Better get the gold. /s

Better get in line early as I suspect Apple sell outs of gold day one. and then for 2 weeks back ordered.
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Woz will get one in every shade of 5C and 5S to reflect his every mood. lol.gif
 
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post #15 of 62
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post #16 of 62
Quote:
Originally Posted by anantksundaram View Post
 

What it signals to me is that -- for the first time since the iPhone was introduced -- demand could be slightly soft.

 

I really, really hope I am wrong. We'll have an early sense tomorrow.

 

I don't think it signals that at all.  It signals that WalMart wants a piece of the early-adopter action and the only way to get that is to discount.  Who else in their right mind would buy from WalMart rather than an Apple Store or online?

 

And what exactly do you expect to learn early tomorrow?

post #17 of 62
Quote:
Originally Posted by sog35 View Post

This tells me one thing: The 5C has major price flexability.  Apple margins must be massive on this phone at $550.

It tells you absolutely nothing about Apple's margins. WALMART is discounting the phone, not Apple. And Walmart has a long history of offering loss-leaders and/or reducing margins on items to get people into their stores.
Quote:
Originally Posted by pazuzu View Post

NO we won't because who in their right mind would upgrade from a 4S to a 5C?

The same type of people who upgraded from the 4S to the 5? Plus the ones (typically younger audience) who prefer the colors?

i.e., many millions of people.
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post #18 of 62
Quote:
Originally Posted by malax View Post
 

And what exactly do you expect to learn early tomorrow?

Some guesstimates based on orders being taken starting 3:01AM EST tomorrow.

post #19 of 62
Quote:
Originally Posted by malax View Post
 

Who else in their right mind would buy from WalMart rather than an Apple Store or online?

 

The answer might surprise you.

 

Walmart has made billions selling to people who aren't in their...

 

Well, you get the idea.

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post #20 of 62
Quote:
Originally Posted by malax View Post

I don't think it signals that at all.  It signals that WalMart wants a piece of the early-adopter action and the only way to get that is to discount.  Who else in their right mind would buy from WalMart rather than an Apple Store or online?

Exactly. Walmart is quick to offer discounts on things that look like they're going to be popular - it gets people into their store.

And given that the average iPhone customer is wealthier and better educated than the average Android customer, there's even greater value for Walmart in getting iPhone customers into the store. They are likely not to be your typical Walmart customer, so it increases the customer base.
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post #21 of 62
Quote:
Originally Posted by malax View Post
 

I don't think it signals that at all.  It signals that WalMart wants a piece of the early-adopter action and the only way to get that is to discount.  

I should have clarified: I really meant weak demand signal for the 5C (Walmart's 'discount' is 20% for the 5C versus 5% for the 5S).

post #22 of 62
Quote:
Originally Posted by jragosta View Post
 
Quote:
Originally Posted by malax View Post

I don't think it signals that at all.  It signals that WalMart wants a piece of the early-adopter action and the only way to get that is to discount.  Who else in their right mind would buy from WalMart rather than an Apple Store or online?

Exactly. Walmart is quick to offer discounts on things that look like they're going to be popular - it gets people into their store.

And given that the average iPhone customer is wealthier and better educated than the average Android customer, there's even greater value for Walmart in getting iPhone customers into the store. They are likely not to be your typical Walmart customer, so it increases the customer base.

If so, why do you think they haven't done that before with an iPhone release?

post #23 of 62
Quote:
Originally Posted by anantksundaram View Post
 

I should have clarified: I really meant weak demand signal for the 5C (Walmart's 'discount' is 20% for the 5C versus 5% for the 5S).

 

It could be that Walmart thought (as I do) that there isn't enough price differentiation between the 2 models and wanted to make sure they moved the 5C.

 

It's also a perfect opportunity to draw in some customers that might not otherwise shop at Walmart.

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post #24 of 62
Quote:
Originally Posted by sog35 View Post

This tells me one thing: The 5C has major price flexability.  Apple margins must be massive on this phone at $550.

I really think the unlocked price of the 5C is inflated.  I fully expect to see more of these 'deals' especially in China/India. 

Not sure why it tells you that. Like is often the case, the carrier is subsidizing these types of discounts through two year contracts, not Apple. Otherwise, you would see a discounted unlocked price for carriers like Tmobile.
post #25 of 62
Quote:
Originally Posted by island hermit View Post
 

It could be that Walmart thought (as I do) that there isn't enough price differentiation between the 2 models and wanted to make sure they moved the 5C.

 

It's also a perfect opportunity to draw in some customers that might not otherwise shop at Walmart.

That's possible too, as is my hypothesis.

 

I am predicting that, by Christmas shopping time, Apple's 'official' price of the 5C will be lowered to $0/$99 w/contract for 16GB/32GB. (Nothing would make me happier if I was proved wrong on all of these fronts).

post #26 of 62
Quote:
Originally Posted by jragosta View Post

Quote:
Originally Posted by sog35 View Post

This tells me one thing: The 5C has major price flexability.  Apple margins must be massive on this phone at $550.

It tells you absolutely nothing about Apple's margins. WALMART is discounting the phone, not Apple. And Walmart has a long history of offering loss-leaders and/or reducing margins on items to get people into their stores.
Quote:
Originally Posted by pazuzu View Post

NO we won't because who in their right mind would upgrade from a 4S to a 5C?

The same type of people who upgraded from the 4S to the 5? Plus the ones (typically younger audience) who prefer the colors?

i.e., many millions of people.

Yes!

Likely, Wal-mart buys the $99/$549 iPhone 5C from Apple for $400, net 30 days -- and is reimbursed by the carriers for selling contracts.

I don't know anything about the carrier deals with other resellers like Wal-mart.

But, I do understand Wal-mart's pricing/profit structure -- They could sell an unlocked $549 5C for $450 and be well within their objectives.

But @jragosta is correct -- Apple's margins selling to resellers remains unaffected!
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post #27 of 62
Quote:
Originally Posted by anantksundaram View Post

Quote:
Originally Posted by island hermit View Post

 
It could be that Walmart thought (as I do) that there isn't enough price differentiation between the 2 models and wanted to make sure they moved the 5C.

It's also a perfect opportunity to draw in some customers that might not otherwise shop at Walmart.
That's possible too, as is my hypothesis.

I am predicting that, by Christmas shopping time, Apple's 'official' price of the 5C will be lowered to $0/$99 w/contract for 16GB/32GB. (Nothing would make me happier if I was proved wrong on all of these fronts).

I don't think that Apple, the manufacturer, will need to set the 5C prices lower.

The resellers are setting a lower "street" price by lowering their markup/margins.

I think that Apple, the reseller, will approximate the "street" prices (at their option) to remain competitive.


Paraphrasing a prior post:

"Now the "normal" price for a contract phone is $99 instead of $199."


And, a new assertion:

Now, the "street" price for a contract phone is $79 instead of $199.
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post #28 of 62
Quote:

Originally Posted by anantksundaram View Post

 

I am predicting that, by Christmas shopping time, Apple's 'official' price of the 5C will be lowered to $0/$99 w/contract for 16GB/32GB. (Nothing would make me happier if I was proved wrong on all of these fronts).

 

Ouch!

 

Well, I have to say that I am on the fence about the 5C... tilting towards soft sales.

 

Like you, I don't wish ill towards Apple and hope I am wrong.

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post #29 of 62
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Originally Posted by Dick Applebaum View Post


I don't think that Apple, the manufacturer, will need to set the 5C prices lower.

The resellers are setting a lower "street" price by lowering their markup/margins.

I think that Apple, the reseller, will approximate the "street" prices (at their option) to remain competitive.


Paraphrasing a prior post:

"Now the "normal" price for a contract phone is $99 instead of $199."


And, a new assertion:

Now, the "street" price for a contract phone is $79 instead of $199.

 

Sounds like a race to the bottom. Very unApple.

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post #30 of 62
Quote:
Originally Posted by island hermit View Post

It could be that Walmart thought (as I do) that there isn't enough price differentiation between the 2 models and wanted to make sure they moved the 5C.

Or, it could simply be that Walmart expect the 5C to be a huge seller and often discounts hot items.

The 5C is already half the price of the 5S (in Walmart), so I don't think the price difference is the issue.
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post #31 of 62
Quote:
Originally Posted by island hermit View Post

Sounds like a race to the bottom. Very unApple.

As pointed out above, it's NOT Apple. It's Walmart.

If it was Apple, everyone (including the Apple Store) would have a $79 price.
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post #32 of 62
Quote:
Originally Posted by malax View Post
 

 

I don't think it signals that at all.  It signals that WalMart wants a piece of the early-adopter action and the only way to get that is to discount.  Who else in their right mind would buy from WalMart rather than an Apple Store or online?

 

And what exactly do you expect to learn early tomorrow?

 

Walmart don't want to sell you an iPhone they want to sell you an iPhone + plan + accessories + warranty.

post #33 of 62
Quote:
Originally Posted by jragosta View Post


As pointed out above, it's NOT Apple. It's Walmart.

If it was Apple, everyone (including the Apple Store) would have a $79 price.

 

I guess you didn't bother to read Dick's comment.

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post #34 of 62
Here are some numbers to run:

The BOM/MFG costs for the iPhone 5 were $207.

http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx

I suspect the same costs for the 5C will be In the $180 range.

I don't know what other costs Apple assigns directly to the device -- but let's say it's $20.

So, $180 + $20 == $200 total direct cost of the 5C.

Apple can sell the 5C to resellers for $400.

Apple gross profit per 5C = $400 - $200 == $200 or 50% margin.


And... the resellers can sell the 5C to end users at whatever contract or unlocked price meets their profit objectives.
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post #35 of 62
Quote:
Originally Posted by jragosta View Post

The 5C is already half the price of the 5S (in Walmart), so I don't think the price difference is the issue.

 

Hahahahahaha... oh, sorry. It just sounded funny.

 

I think if we were talking about $1000/$500, that might be huge... but we're talking $199/$99. At Walmart that might be huge... but in reality... it aint... considering what you get for the difference.

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post #36 of 62
Quote:
Originally Posted by jragosta View Post

Exactly. Walmart is quick to offer discounts on things that look like they're going to be popular - it gets people into their store.

And given that the average iPhone customer is wealthier and better educated than the average Android customer, there's even greater value for Walmart in getting iPhone customers into the store. They are likely not to be your typical Walmart customer, so it increases the customer base.

I always get my iPhones at Walmart not really even because of the discounted price, but they always seem to have them in stock release day with no line. Selfishly- Sad to see this publicity.

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post #37 of 62
Quote:
Originally Posted by anantksundaram View Post

If so, why do you think they haven't done that before with an iPhone release?

They have. It's always $86 for the previous and $186 for the new.

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post #38 of 62
If you have ever purchased a phone from Wal-Mart you'd know its worth an extra $10 bucks to buy it somewhere else. They are clueless and a pain to deal with.
post #39 of 62
Quote:
Originally Posted by island hermit View Post

Quote:
Originally Posted by Dick Applebaum View Post

I don't think that Apple, the manufacturer, will need to set the 5C prices lower.


The resellers are setting a lower "street" price by lowering their markup/margins.


I think that Apple, the reseller, will approximate the "street" prices (at their option) to remain competitive.



Paraphrasing a prior post:


"Now the "normal" price for a contract phone is $99 instead of $199."



And, a new assertion:


Now, the "street" price for a contract phone is $79 instead of $199.

Sounds like a race to the bottom. Very unApple.

Yeah, "Sounds like a race to the bottom. Very unApple." was my first reaction too.

But Apple isn't participating in the race -- the resellers are!

Apple, the manufacturer still gets the same margin.

Apple, the reseller, may slightly lower selling price to be competitive... but they still pay Apple, the manufacturer the full wholesale price.


But, if you step back a bit -- we may be at the beginning of a drastic change in the way phones are sold and subsidized,
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post #40 of 62
Quote:
Originally Posted by jragosta View Post


It tells you absolutely nothing about Apple's margins. WALMART is discounting the phone, not Apple. And Walmart has a long history of offering loss-leaders and/or reducing margins on items to get people into their stores.
The same type of people who upgraded from the 4S to the 5? Plus the ones (typically younger audience) who prefer the colors?

i.e., many millions of people.

 

Yes, all those 4s contracts running out or at the least into the subsidy zone. Plus all the people who live where the 5c radio gives them better speed than the 4/4s.

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