$99 Wal-Mart iPhone Seems Unlikely

[matticus008]

Interesting - it sounds like EU law casts its net slightly wider than in the US.

It does, but the practical effect is roughly the same. European law has a slightly lower threshold for the amount of pressure that must be applied, but also has more liberal curing provisions, so the number of trade practices curbed is fairly comparable. To go with the net metaphor, it is a wider net, but one with bigger holes.

In both cases, it's fairly easy to avoid falling into the net when it comes to price maintenance, as opposed to out and out price fixing.

 

[techfreak85]

ok see, i would buy one at wal mart if you still had to go to the ATT store. im trying to get my hands on an unactivated iphone so i can use it as ipod touch with a camera, gps and (barely) better speaker.
would walmart give me an unactivated iphone unlike apple and att?

 

[sjo]

Apple needs a 99.- iphone if they want to keep sales up
My guess : end of January the 8 Gb will go down to 99.- when the 32 Gb is announced

Saludos

as pretty much everybody conveniently forgets that you get $70+/month subscription on top of the $99 upfront payment the current financial crises seems much easier to understand. people apparently just don't not understand that their in effect borrowing when they buy "cheap" iphones...

i fail to see how $99 iphone is news/rumor worth reporting back and forth once or twice a week, iphone already sold at $0 or $1 by several carriers.

 

[jtrammell]

Walmart iPhone

Fox Business channel just announced that Walmart will start selling iPhones December 27th. No mention of price or a size change to 4 GB.

Obviously Apple is trying to make up for weaker than expected iPod sells.

Jimmy

 

[lazyrighteye]

Looks like it's confirmed...

http://www.bloomberg.com/apps/news?pid=20601103&sid=a4YIU21gLaSY&refer=us

Pfft - Shaw Wu...
Has he ever been right about anything relate to Apple?

 

[alexbates]

ok see, i would buy one at wal mart if you still had to go to the ATT store. im trying to get my hands on an unactivated iphone so i can use it as ipod touch with a camera, gps and (barely) better speaker.
would walmart give me an unactivated iphone unlike apple and att?

No, you would be required to sign the 2-year service agreement with AT&T, but will have to go to the AT&T store to active the iPhone so you could use it.

From what I have observed, Wal-mart will not be selling the 4GB iPhone for $99, they will be selling the 8GB iPhone for $197.

If you want an inactivated iPhone, you have 2 options:
a) you can buy an iPhone for $199, cancel the 2-year service agreement after it is signed, and pay a $200 fee
or
b) buy an iPhone off of Amazon, eBay, or some other online stores.

 

[Michael CM1]

That is called price fixing, and is against the law in almost all civilised countries.

No, it's not called price fixing. It's called the manufacturer telling resellers how much they want it to be sold for. Price fixing would be Apple and Microsoft getting together and deciding that no iPod or Zune would be sold for under $500. Another scenario would be Walmart and Best Buy collaborating on a price.

 

[Michael CM1]

Pfft - Shaw f*cking Wu...
Has he ever been right about anything relate to Apple?

What they don't tell you is Kaufman Brothers was founded by Andy Kaufman. He gives no reason for why $99 is some magic number. The magic number has zilch to do with the handset. I'd say the main hangup is the $70/month you have to spend on it through AT&T. It can be hard to use $30 worth of Internet at home, but it can be downright insane to do it on a mobile device. I don't know what the data limit is on an iPhone plan, but I doubt it's a little as the 100MB/month I use.

 

[joemama]

There is a market (for a $99 model) for those who are not tech savvy, have no music and never download apps.

Won't happen. Apple's App Store has been a HUGE success. It's the way of the future as far as cell phones are concerned.

My question is this - Why would I go to Walmart to buy an iPhone over ATT or the Apple Store? Walmart won't have a leg up as far as models go, so what's the point?

I do hope, however, they use it to announce:

$197 - 16 Gig iPhone
$297 - 32 Gig iPhone

(maybe a $99 8 gig to clear out inventory) THink about it. If Apple has a lot of them around, what better way to get rid of them (while supplies last).

 

[manowarwi]

There is a market (for a $99 model) for those who are not tech savvy, have no music and never download apps. A 4GB iPhone, even at $99, is such a bad deal. For 2 years, purchaser could not upgrade their phone. In 2009 we expect both a speed bump and, very likely, a new model before the end of the year. As apps mature with more features and larger footprints, most users with only 4GB will soon get GB envy.

I would consider myself to be extremely tech savvy (I have a few letters after my name including ACTC, ACMT, Network+, ) but I would love a 4gb model for $99. I don't listen to music on my phone and never will - I use a $10 generic MP3 player on my motorcycle / working out that if it breaks I don't care about, and 4GB is more than enough space to run all of the apps you could imagine. Well maybe not all you could imagine but more than enough. I would pay $99 for a smart phone such as the iPhone, but $199 jumps to the range where I wouldn't get enough utility out of it to justify the extra $100.

 

[iWizzard]

My question is this - Why would I go to Walmart to buy an iPhone over ATT or the Apple Store? Walmart won't have a leg up as far as models go, so what's the point?

IF Distanse to Walmart is < Then Distanse to AT&T OR Apple_store
Then Go to Walmart

 

[paul333]

re 197

When I worked in retail we would drop the price say if its $200 to $199. Then $199 to $198. Then $198 to $197. Then...that product # is discontinued or replaced. If you could find a product that is $**7 and it stays on the shelf very long it will go down in price sometimes %50 off. Probably not with the iphone though.

 

[Laglorden]

Price fixing is when different companies COLLUDE to fix a price for a similar or the same product. For example, if Microsoft, Apple, and the Linux folks sat down and said, we should all ell our operating systems for $500, that's price fixing.

However, a manufacturer does have control of how, and at what price, their products are sold at. So I think Apple can dictate prices to their partners, or simply not sell to them. Free market.

Apple can dictate their prices to their partners or simply not sell to them, but I don't think Apple can (or should not be able to) dictate which prices their partners should sell to their end customers. "Sell the IPhone for $199 or we will not sell any to you!!" -"But we will pay the same price ($188 or whatever) that everybody else pays, just shrink our own margins..." -"Sell it for $199 or forget about it!" Free market? kind of...

 

[tbishh]

NO!!!!!!!!!!!


Wal-mart...really?

Are they going back to home activation?

Best Buy was bad enough, though it would make sense that they carry it since they are an authorized apple reseller and also have AT&T certified employees, but Walmart? they sell iPod's and that's it.

 

[twoodcc]

well, at least they'll be selling the iphone at walmart. that is still a good thing.

 

[ant-macyourself]

Fox Business channel just announced that Walmart will start selling iPhones December 27th. No mention of price or a size change to 4 GB.

Obviously Apple is trying to make up for weaker than expected iPod sells.

Jimmy

Actually, AppleInsider just posted an article last week saying many major retailers are running low or sold out of iPod inventory. Demand is higher than expected, despite the economical troubles.

I think the Walmart deal as a whole is a positive for Apple. They need to get as many distribution points as possible, especially when there are no online sales anymore. There are a lot more Walmarts than Best Buys or Apple Stores.

 

[Eddyisgreat]

Saying that there will be an iPhone Nano with no wifi....thats just silly.

The iPhone is an internet centric device. That's why you are supposed to get a data plan with it. Half of the Apps require Data for certian connectivity (be it multiplayer or just general usability when there is no service). By selling a version that would be less application oriented there would be no compelling reason to get one. Sure, Notes is pretty cool, and the iPod intergration is great, but pretty much every other app would require data of some sort. I know-when I unlocked my first gen back in the 1.x.x days and there was no t-mobile data fix, everything I would try to do wouldn't work because of lack of connectivity.

Also, a smaller screen and overall different configuration would throw alot of developers off. I suspect thats why the 3G iPhone was keep reasonably the same-adding too many advanced functions over the 1st Gen iPhone would create a windows-mobile type paradigm. Higher resolution, different button layouts, lack of Updates amongst the first generation etc etc.

Don't get me wrong, i'd love to see it. But a nano version...that would be crazy. Apple will do well in this economy. Their products are still sought after, even if the demand is artificially manipulated by price. I could see a 4 Gig version just to get the device in the hands of more people and maybe cater to those who are less power users/music enthusiasts/media whores, but a whole 'nother version? Nahh.

 

[nickXedge]

It's a little ironic that one of the main sticking points that prevented Verizon from selling the iPhone, was Apple's refusal to let them sell it through Best Buy and other Verizon outlets.

I was under the impression it was the activation procedures that kept the iPhone off of Verizons service.

 

[stone315]

but with a smaller screen and no ability to run downloadable Apps. Maybe another cost-cutting measure is Edge and no Wifi? If we're lucky it will have 3G and negate the need for Wifi. Maybe no GPS or camera either, but more like a phone a wireless internet device.

The iPhone and the app store are virtually synonymous by now. It will be much more difficult to sell it, even at a cheaper price, if you cut out the third party app functionality. I can see GPS being cut out, but every phone has a camera now. People expect that and will want to have that functionality. Cutting out wifi wouldn't be very logical either; it's already in the iPod Touch, so customers will expect it to be in the iPhone as well.

 

[kloppenator]

Price fixing is when different companies COLLUDE to fix a price for a similar or the same product. For example, if Microsoft, Apple, and the Linux folks sat down and said, we should all ell our operating systems for $500, that's price fixing.

However, a manufacturer does have control of how, and at what price, their products are sold at. So I think Apple can dictate prices to their partners, or simply not sell to them. Free market.

This is 100% true. I work in retail and weber does this with their BBQ's. You will never see a price on a bin tag lower in home depot versus Ace Hardware. Weber's does not allow us to put them on sale, but if we are having a bag sale , the BBQs will be marked off the same as any oyer product.

 

[kdarling]

I was under the impression it was the activation procedures that kept the iPhone off of Verizons service.

Never heard that. The original USAToday interview (see here) said that:

Apple wanted a part of monthly revenues. Well, that plan only lasted one year. Now it's subsidized like every other phone.

Apple wanted control over customer service. Verizon didn't like that.

And Apple insisted they control distribution, which would leave out Verizon distributors such as Best Buy and Walmart. Verizon didn't want to screw over their partners.

Now, a year and half later, Apple has back off of much of what they insisted on.

 

[slu]

Do you even know where to "look up price fixing"? As I've said above, I'm talking from some experience of EU competition law rather than US Anti-Trust law but I can promise you that you are talking out of your arse, at least in relation to the EU. I am not saying anything about the current issue, but it is possible both for there to be a breach of competition law where a company enjoying a monopoly (not as easy to define as you might think) abuses that monopoly and also where there is a 'vertical price-fixing agreement' between a company and its distributors, retailers, suppliers etc.

Listen, buddy. First of all, just because something comes up in a thread that you may have extensive knowledge about doesn't mean you get to be a pompous ass. WE GET IT, you know about competition law. Rather than be an ass, perhaps you could be helpful and maybe we could learn something?

Second, my comment was in reference to the first comment about price fixing. Whether or not I know where to "look up price fixing" is irrelevant. But I'd imagine a dictionary would be the first place to start.

We ALL understand that competition law, or all law for that matter, is nuanced and complex based on the specifics of the case.

It is well known that when a party agrees to resell Apple products, they voluntarily agree to not discount that product below a certain floor. Is this price fixing? If it is, then it must not be against the law in all civilized countries like the comment I was referring to said.

Perhaps I, like you, was being an smart-ass in my reply, which I now regret. But I do stand by my comment's original intent, which was that Apple has the right to negotiate terms of resale for their products, which include a price floor for the products. The vendors agree to this voluntarily. They are under no obligation to do business with Apple and many other companies make competitive products.

As you stated:

"it is possible both for there to be a breach of competition law where a company enjoying a monopoly (not as easy to define as you might think) abuses that monopoly and also where there is a 'vertical price-fixing agreement' between a company and its distributors, retailers, suppliers etc."

Easy to define or not, do you think anyone would define Apple as enjoying a monopoly in the cell phone business? Or any business? Do you think they are guilty of vertical price fixing?

Maybe, you could give your opinion since you know so much about the topic? Or is it just more fun to talk down to people?

 

[RTiii320]

Dec. 28 ... 3days after Christmas ... interesting

 

[Jai2]

Apple + Walmart = Yet More Screwed Labor

Walmart contributes nothing positive to the world, to workers or to quality products. It is so disppointing that an innovative company such as Apple, with all of their possible options, would partner-up with the poster children for the most rapacious elements of the capitalist pyramid scheme. I do all of my creative work on Mac's and love them, but now that I'm due to update my phone, I will avoid buying an iPhone -- or anything else that I possibly can --that is sold at a Walmart. (Shop local for locally made, green products.)

How much more screwed does the economy need to get before people wise up to the role Walmart (the world's biggest retailer) has played in forcing companies to cut their production costs by shipping our jobs overseas to be performed by underpaid, unrepresented and mistreated labor? Did Apple learn nothing from getting spanked previously over their own overseas manufacturing issues? Apple should be blazing the trail away from Walmart and their practices & retail bullying-- not kissing up to them.

At what point do we subjugate our desire to have "now & cheap" with the longer range, larger picture of having decent jobs at decent wages making sustainable and useful products? How long do we shoot ourselves in the foot over and over? What do we need more-- a new gadget, or a roof over our heads, food on the table, health care?

Apple's decision to mate with the devil is a great disappointment.

 

[matticus008]

It is well known that when a party agrees to resell Apple products, they voluntarily agree to not discount that product below a certain floor. Is this price fixing?

Not to interject, but no, it's price maintenance, and the situation you describe is indeed illegal in all western legal systems.

Your description is not what e.g. Apple, Bose, Garmin do, though. It's a subtle but critical difference. The retailers are not agreeing to sell at a set price; they are agreeing that if they meet certain qualifications, there are consequential benefits. At no point does it amount to a promise to sell at a particular price, because that would allow for contractual penalties impinging on the retailer's right to set his prices independently.

Apple has the right to negotiate terms of resale for their products, which include a price floor for the products.

An agreement to set prices around a specified level, whether a floor or a ceiling, is unlawful, whether the intent is innocent or malign.

Do you think they are guilty of vertical price fixing?

Well, apart from the fact that being a monopoly has nothing to do with anything, vertical price fixing requires the exercise of a degree of control and a binding promise not present here. What we have is indeed a vertical restraint, but one that cannot be labeled price fixing.

It's called price maintenance, and as long as participation is voluntary and there are no penalties for failure to comply (declining to renew agreements or fill future orders is not a penalty), it is a valid exercise of free dealing.