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Seth Weintraub

Apple versus Google

Walmart represents 'mainstreamification' of iPhone

37 comments

TAGS:$99, 4Gb, Apple, iPhone, Walmart
IT TOPICS:Macintosh & Apple, Mobile & Wireless, Personal Technology

A lot has been made of Apple's seemingly sure move to Walmart as a point of sale for the iPhone. Whether or not Apple releases an "everyman" $99 4Gb iPhone still remains to be seen, but this isn't the main point. The macro trend, if you haven't recognized it yet, is that the iPhone has gone beyond mainstream.

And the Apple brand? Don't worry, it will be fine. Walmart sells Coke and GE products, which are by some accounts the world's most valuable brands. They aren't suffering any dilution.

Walmart also sells iPods – and has for awhile – without any backlash. Heck, they may even start selling MacBooks. Do they sell Louis Vuitton handbags? Nope. Different demographic. But they do sell Sony.

Apple is trying to push this phone beyond even the urban middle class. The iPhone will now be in every small town in America. Beyond even the reach of Best Buy and AT&T stores, Walmarts are, for better or for worse, where a huge swath of Americans from all income brackets do their weekly shopping. The iPhone will be in front of every face, day after day, week after week.

Just like the iPod has been.

If there is a $99 version, this will tempt the lower income demographic a bit more, but the biggest expense – by a landslide – is the AT&T monthly fee. In fact, on a few of AT&T's plans, the $99 will be eclipsed in the first month of wireless charges alone. This, however, will sell many more phones and won't tarnish the brand.

Not everybody is as sure as I am that cheaper iPhones are a good idea.

UBS analyst Maynard Um said yesterday,

"A $99 iPhone would be atypical of Apple's premium brand strategy. More likely is a scenario in which select Wal-Mart, and possibly Sam's Clubs, are simply added as further iPhone distribution points."

Really? What would a $59 iPod do to the brand?

The most upset person is likely Steve Jobs, who doesn't seem like a Walmart kinda guy. But considering the 4.5 million iPhones he could sell, it isn't really a decision at all, and he's made much more painful strategic moves in the past (selling part of Apple to Microsoft) that make this pale in comparison.

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What People Are Saying

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Who cares who sells it

Submitted by Mr Landlord on December 12, 2008 - 11:12 A.M.

It doesn't matter to me WHO sells the product, I'm mostly concerned if I can get it easily. Personally I despise Walmart, and will always pay the extra couple bucks to shop somewhere better, but the fact that Walmart will begin carrying it is good news because all it can do is drive the price down. Apple is making far too much money on this thing at it's premium exclusive pricing right now with ATT.

I'm more excited about when the Storm will be available on carriers other than Verizon in the states!

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Adding fuel to the iPhone on Verizon rumor

Submitted by Dan on December 11, 2008 - 5:37 P.M.

Of course I'm probably wrong but doesn't this add fuel to the rumor that the iPhone will be on Verizon in 09? One of Verizon's biggest complaints when Apple originally approached them was that Apple wanted the phone to be exclusively sold through Apple and Verizon stores. Now that Wal-Mart and Best Buy have them on their shelves it leaves little for Verizon to complain about. Am I just dreaming and reading too much into this?

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FORGET THE IPHONE, LET'S GET TO THE REAL POINT.

Submitted by motie38 on December 11, 2008 - 10:37 A.M.

DEAR SETH WEINTRAUB,
I'M SURE IF YOU GOT AN EMAIL, OR WERE IN A CHAT CONVERSATION WITH SOMEONE WHO PUT EVERYTHING IN CAPITAL LETTERS LIKE THIS, THAT YOU KNOW ENOUGH NETIQUETTE TO EXPLAIN TO THEM THEY ARE SHOUTING, AND THAT IS CONSIDERED RUDE.

And now that I have your attention, since you may not be old enough to know the difference, or perhaps you had bad teachers, that Apple would be stupid to release a 512MB iPhone, as you suggested. That's right. There is a difference by a factor of 8 between a GB(Giga-Byte), and a Gb(Giga-bit). You said Apple was considering a 4Gb(four Giga-bit) iPhone. I doubt that. Would you please take care with your numbers in the future, and tell all your friends and colleagues the difference between a "B" and a "b"? I'm sure you don't mean to be offensive, but I'm also sure I'm not the only one getting tired of having to interpret what the whole blooming IT media and advertising industry means, instead of just reading the numbers, just as there are plenty of people who tire of being SHOUTED AT in an email.

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99 would be interesting, but diluting

Submitted by skeptical1 on December 11, 2008 - 2:08 A.M.

Brand management is in the DNA of Apple's core business values; I would be supremely surprised if they permitted a 99 dollar phone to be sold by Walmart because, like it or not and even though they outsell everyone on nearly everything, they are the working man's store, not the premium store. This point is so strong that Levi Strauss, to this day, will not sell their so-called premium lines in Walmart, and developed the "signature" line exclusively for Walmart. They didn't want the brand diluted, or the image tarnished by lower prices in a discount store (poppy-cock, in my opinion, and one reason why they've lost money every year for the last 10 years). I think Apple will play it the same way: 199 / 299 for an iPhone, or not at all.

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iPhone & AT&T

Submitted by Just Me on December 10, 2008 - 11:36 P.M.

My son works at AT&T. The exclusive service provider contract is going to expire soon if I'm not mistaken.

I would get an iPhone if it were compatible with my Virgin Mobile service which is tops in my opinion. I think Virgin Mobile and iPhone would be perfect partners!

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Virgin Mobile is on the

Submitted by Robert on December 11, 2008 - 1:08 A.M.

Virgin Mobile is on the Sprint system. The only way that Virgin is good for you is because it is for a pre paid person with bad credit.
Verizon on the other hand has the best system hands down.

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So if you saw me talking on

Submitted by Orng on December 11, 2008 - 12:23 P.M.

So if you saw me talking on my Virgin Mobile phone, you would jump to the conclusion that I have bad credit?

Pre-paid isn't just for people with bad credit, it's also for people who use their mobile for less than, say, 50 minutes per month.

I pulled out a year's worth of cell phone bills, worked out my local and long distance minutes for each month, and figured out that on a contract, I am paying twice as much as I need to, based on my usage.

On Virgin Mobile's prepaid plans, the only time I would come even close to my monthly Rogers bill was in December, because of the holidays. Even with the $5 text messaging add-on.

So now that I have one less monthly bill that I'm responsible for, my credit is even better.

But you can assume I have bad credit, because I'm assuming that you're an arrogant idiot who jumps to conclusions.

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Prepaid Phones

Submitted by Anonymous on December 12, 2008 - 12:39 P.M.

Great reason to get Virgin. A friend of mine does the same thing with a different provider primarily because his children do not know how to disipline themselves on the good use of a cell phone. When they run out of minutes just jawing, ooopps, out of gab for the month. So, there are many reasons for using prepaid cell packages, even though some are for reasons of us cheeeeep people who want to use our finances for other fun thingies.

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Mainstream...?

Submitted by PulSamsara on December 10, 2008 - 10:08 P.M.

Since when hasn't the iPhone... or iPod ... or iWidget not been mainstream ?

The follower consumers I see all look pretty mainstream to me. Maybe what you're trying to point out is the the 'brand' is diluting... getting watery.

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Iphone at Walmart?

Submitted by Anonymous on December 10, 2008 - 7:11 P.M.

I would not switch my current service provider just for the Iphone, AT&T is an overkill in plan pricing and customer service. I would consider an Iphone if it was unlocked to work on any network.

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