Analyst: $99 Wal-Mart iPhone Not Likely

| Apple Stock Watch

Buying an iPhone 3G seems a little more likely now that Bloomberg and the San Jose Mercury News are backing up the rumors, but the likelihood that Apple will sell a US$99 model through the retailer seems slim, and could even cannibalize other iPhone and iPod touch sales, according to UBS analyst Maynard Um.

"We believe a $99 iPhone would be atypical of Apple's premium brand strategy ($149 seems more logical if a 4GB model were introduced)," Mr. Um said. "More likely is a scenario in which select Wal-Mart (and possibly Sam's Clubs) are simply added as further iPhone distribution points (like the Best Buy announcement)."

He added that while a $99 price point for a 4GB iPhone could stimulate incremental demand, it would come at a cost to 8GB and 16GB iPhone sales as well as iPod touch sales.

Rumors began circulating recently that Wal-Mart would start selling a new 4GB version of the popular iPhone 3G on December 28. Several California-based Wal-Mart stores, however, have indicated that they expect to stock the 8GB and 16GB models.

Mr. Um is maintaining his "Neutral" rating and $115 target price for Apple's stock. The company is currently trading at $99.34, up 5.34 (5.68%).

Comments

deasys

Um, Maynard? Doesn’t “neutral” mean “sell that sucker”? If so, you haven’t got a clue…

ppartekim

I wonder if the $99 would be for the 8GB and Apple introduces a 32GB at MacWorld… Then there would be a $99 8GB, $199 16GB & $299 32GB..

I really want a 32GB version to replace my 40GB iPod..

Lavode

Heard on 740 AM news that they are confirming the iPhone at Wal-Mart.  I believe they said the price would be lower than $199.

gezebo

umm.. 197.88 iPhone at Walmart.

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