Is Wal-Mart Endangering Apple’s Pricing Schemes?
While it should come as no surprise that Wal-Mart (NYSE:WMT) typically features cheaper prices than its rivals on many products, the retail giant’s prices for the latest iPhone models has some industry watchers scratching their heads. Walmart is selling the 16GB iPhone 5C for $79 and the 16GB iPhone 5S for $189 if customers sign-up for a two-year service contract, reports SFGate.
On the other hand, Apple (NASDAQ:AAPL) and its retail partners start their iPhone 5C prices at $99 and their iPhone 5S prices at $199. This means that Wal-Mart is selling the iPhone 5C for 20 percent less than any other retailer. Similarly, Wal-Mart’s iPhone 5S price is $10 less than competitors’ prices.
Although Apple can’t force retailers to sell its devices at a certain price, Kyle Stock at SFGate notes that the Cupertino-based company does provide some fairly strong incentives for retailers to abide by the standard sticker price. For example, Apple offers retailers a financial marketing incentive if device prices are kept above a certain level.