MONTREAL - If the iPhone is sold at U.S. retail giant Wal-Mart, it will make Apple's much-hyped device available to more consumers and increase competition with Research In Motion's (TSX:RIM) BlackBerry, which is also trying to win more users outside its business market.
It's all about winning over as many consumers as possible, analysts said Monday.
Wal-Mart would be the second independent retail chain after Best Buy Inc. to sell the iPhone, also sold at Apple, AT&T and Rogers Wireless (TSX:RCI.B) stores.
There were media reports, citing Wal-Mart employees in the United States, that said the retail store would sell a version of the iPhone just after Christmas. It's expected a four-gigabyte iPhone would sell for US$99 at U.S. Wal-Marts.
The iPhone normally sells for $199 for an 8GB model and $299 for 16GB and is carried exclusively on AT&T in the United States and on Rogers Wireless (TSX:RCI.B) in Canada.
There was no word from Wal-Mart Canada on whether it would sell this new iPhone.
Tech analyst Jack Gold said smartphone makers like Apple and RIM have to go where the consumers are, but Apple is ahead in consumers' minds at this point.
"Now having said that, there's a very clear reason Wal-Mart wants Apple because Apple has this cache and all consumers know Apple," said Gold of J.Gold Associates in Northborough, Mass.
"RIM wouldn't have the same amount of leverage with a Wal-Mart as Apple would," said Gold.
But RIM also sells a selection of BlackBerrys in Canada and the United States at Wal-Mart and other retailers including Best Buy, Amazon.com, Radio Shack and Future Shop.
Wal-Mart in the U.S. recently offered the AT&T BlackBerry Bold for $199.99 with a $199.99 mail-in rebate and was offering free shipping, making the device free.
Analyst Carmi Levy said Apple is a master of hype.
"It's totally about buzz," said Levy of Toronto's AR Communications Inc.
Apple has "planted a seed" in consumers' minds and they may wait until the cheaper iPhone is available and try to blunt the competition, he said.
"Apple is simply following the same pattern over time, upgrading and expanding your distribution into mainstream channels," said Levy, senior vice-president of strategic consulting.
Wal-Mart is the "perfect place for a low-end iPhone," Levy added.
RIM doesn't get the same kind of buzz because that's not its marketing strategy and that's not its core market, he said.
Tech blog Boy Genius Report, who first reported the Wal-Mart-Apple deal some weeks ago, said a 4GB iPhone wouldn't be enough for some songs and music videos, "but let's not kid ourselves."
"Anyone looking to spend $99 on an iPhone probably doesn't care that much about storage anyway and they'll be more than happy to drop that amount for one of the best-selling smartphones in the country," the Boy Genius Report recently said.
The Waterloo, Ont., based BlackBerry maker is a leader in the business market, prized for its secure email delivered directly into the device. RIM has recently introduced two models with consumer appeal, a flip phone and an iPhone touchscreen competitor called the Storm which has garnered mixed reviews.
U.S.-based Gartner technology research company said Nokia, RIM and Apple were the top three global smartphone sellers in the third quarter of 2008.
Gartner said preliminary smartphone sales for the third quarter were Nokia with 15.4 million units sold, RIM with 5.8 million units and Apple with 4.7 million units.
Analyst Nick Agostino of Research Capital Corp. said in order to get smartphones like BlackBerrys and iPhones to more consumers, prices will have to come down.
"It definitely puts pressure on RIM to have devices at lower price points," Agostino said. "Obviously, the flip phone was definitely designed to be, I would say, in that market category. I think this could put pressure to have smartphones, the Storm, in that price range."
