“In what might be an unprecedented move by Apple Inc., the company apparently has agreed to permit Wal-Mart Stores Inc. to sell the iPhone 5C and iPhone 5S at discount prices. The 5C, which carries a list price of $99, will sell for $79, and the 5S will sell for $189, compared with the list price of $199,” Paul Ausick reports for 24/7 Wall St.
“Apple surely will receive its full selling price from Walmart, so revenues will not be affected, but the optics are unusual to say the least,” Ausick reports. “Discounting a new product just two days after it has been introduced is new ground for Apple, at least in our memory. Why would the company do this?”
Ausick reports, “Likely, Apple is running a trial. The company knows that sales of low-priced smartphones are projected to explode in the next few years. Even though the iPhone 5C priced at $99 is a good buy, dollar-conscious consumers might need an extra shove to part with their scarce cash. If sales at Walmart can demonstrate that discount pricing both moves product and provides profits, the company will have set itself up for success in that part of the market in which price is the leading consideration among consumers and where most of the growth is expected. That could make a significant difference in Apple’s future sales in China and other emerging economies.”
Read more in the full article here.
MacDailyNews Take: Most likely is that it is simply a loss leader for Walmart. The same has been done with Apple iPhones and iPads in the past at Walmart and elsewhere.
[Thanks to MacDailyNews Readers “Fred Mertz” and “David E.” for the heads up.]
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Walmart offering Apple iPhone 5 for $127, iPhone 4S for $47, iPad (4th gen.) for $399 – December 14, 2012
MDN’s right or it’s a trial balloon.
An offer in 4-6 weeks after release -might- be a trial balloon. (i.e. after inventory stabilizes)
Offering a discount -at launch- of a ultra-high visibility product that you will absolutely, positively sell out of in a matter of hours is a Walmart loss leader (has to be)
Wow. Ten dollars off. I’m rushing
What Apple really needs to do, apparently, is lower the sky-high price for the iPhone 5C in China.
Heard that it costs as much as a 5S in China but its only because of the taxes that China enforces which Apple can’t change
Dumb move if Apple allowed it.
This agreement between Apple and Wal-Mart never made sense to me. Apple positions itself as a Premium brand. Wal-Mart is the epitome of bargain pricing. Why would Apple be selling their products at Wal-Mart, which is their polar opposite?
Perhaps Apple is trying to improve Walmart’s reputation by association? Or, far more likely, Apple realizes that Walmart has stores all over the place, including many rural areas that do not have an Apple Store or other good retail alternative.
“Why would Apple be selling their products at Wal-Mart”
Because Apple will sell a ton of them to the fence sitters, and make the same profit.
The rest of us (myself included) will still buy them at the Apple stores for nearly the same price because Apple Stores are shinny. 😉
There are a lot of Walmarts in rural areas … exactly where Apple Stores are not!
The association with Best Buy never made sense to me – usually there is an Apple Store within biking distance of a Best Buy. They should have built those mini Apple Stores in a store in Walmarts instead.
Apple sells iPhones at Walmart because lots of people buy phones there… Pretty simple.
Clearly the seller gets a commission from the wireless service provider and thus Walmart is willing to chop $10 to get about $50. This is why Apple wants more phones sold in the store instead of at the cell phone providers stores
Let Walmart reduce the price of the iPhone 5C to $0 if Apple doesn’t have the balls to do it. It’s way too expensive at $550 off contract anyway. $450 is closer to reality. $400 even better.
$350 better still. Of course $300 sounds pretty good but $250 even more attractive. $200 would be great, while $150 not too shabby. $100 would be insane whereas $50 would be unbelievable. Free would also go down nicely. $550 it is.
The flaw in your logic is… it’s a significantly better phone than the galaxy 4 and that sells for $650 (unsubsidized)
So at $100 less than the galaxy, they will sell a billion.
(particularly to the teen through 20’s set)
I hate Walmart, so I won’t buy a phone there.
I’m guessing BestBuy will also get to discount them too. If not, they will match Walmart’s price. BestBuy was selling iPhone 5 for $149 in the last couple months.
Not a great savings when you consider you pay tax on the full retail price plus activation fees (add about $100). But saving of $10 or $20 dollars is still a savings. I personally don’t and will never shop at Wag-Mart (Spell check suggestion-sure why not) because of how they treat suppliers and marketing tactics they’ve used over the years.
What we really need is 2 tier pricing from the Carriers.
1 Price if you bring your own phone and 1 if you get a subsidized phone from them. Rite now it does not make any sense for me to pay full price for the phone up front when I don’t get any discount on my plan price for doing so.
The author of the article apparently does not understand the First Sale Doctrine.
Unless there is a *separate* agreement between WalMart & Apple, WalMart can charge WHATEVER they want for the phone, give them away for free, whatever..
Apple controls all retail prices.
Always.
None of the above. It is simply successful attempt at getting free advertising. And MDN fell for it big time giving one of the biggest companies in the world a free ad.
Two of the biggest companies, not counting the carrier.
If Apple “sets” the price for Walmart then aren’t they guilty of price fixing? That is illegal and Apple and Walmart know that. Unless I am missing something the premise of this conversation is flawed. I think some assumptions have been made here. Collusion is anti-consumer. In a free enterprise system, Walmart can price it how they want.