Why Walmart’s iPhone Deal Was a Huge Mistake
After reports that Walmart (NYSE:WMT) stores were offering unheard-of discounts on Apple’s (NASDAQ:AAPL) iPhone, the retailer has issued a statement saying it “experienced a pricing error in limited stores” and that the issue has since been corrected. The country’s largest retailer had seemingly cut prices of the Apple phones with a two-year AT&T (NYSE:T) contract by as much as $74 at some locations.
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Friday afternoon’s statement confirmed that the correct pricing remained at $188 for the 16GB iPhone 4S and $88 for the 8GB iPhone 4. All Walmart stores offer an $11 discount on traditional carrier-subsidized prices of the iPhone 4 and 4S.
A store in Edmond, Oklahoma, was earlier offering the 8GB AT&T iPhone 4 for just $34 and the 16GB iPhone 4S for $114. Another store in Austin, Texas, was also offering the iPhone 4S for $114. The sale was not reflected on Walmart’s website.
Apple sold 35.1 million iPhones in the first quarter, benefiting from growing international sales as well as continued subsidies provided by wireless carriers AT&T, Verizon (NYSE:VZ), and Sprint (NYSE:S).
Walmart does not account for a very large number of iPhone sales. A study found that Walmart, Target (NYSE:TGT), Radio Shack (NYSE:RSH), and Sam’s Club stores collectively accounted for just 3 percent of domestic iPhone sales, while Best Buy (NYSE:BBY) alone made up 13 percent. The majority of consumers, though, buy their iPhones through carriers or straight through Apple itself, either online or at retail stores.
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