Rumors build on Wal-Mart's iPhone plans

Speculation surrounding Wal-Mart carrying the iPhone reached fever pitch on Wednesday, with a leaked memo saying the retailer would start selling the smartphone on Dec. 28.

The memo, which has been published on Engadget, states that an 8G-byte iPhone 3G will be priced at $197, and a 16G-byte iPhone at $297, with a two-year cell phone contract with AT&T. Speculation last month suggested Wal-Mart would sell a 4G-byte iPhone 3G for $99, so the higher prices could come as a disappointment.

A Wal-Mart spokesman declined comment about the authenticity of the memo. "We've made no official announcement on the iPhone," the spokeswoman said.

Apple did not return messages seeking comment.

Wal-Mart and Apple's iPhone are a good match, said Jack Gold, principal analyst at J. Gold Associates. In addition to increasing mobile revenue, Apple is looking to increase revenue from the iTunes music store and App Store, for which it has to sell more phones. Wal-Mart, which has thousands of large and discount stores in the U.S., will help Apple reach newer audiences. Apple has already sold millions of iPhones through its Apple Retail Stores, retail stores and carriers worldwide.

Wal-Mart will provide Apple access to a conservative-spending audience that would not readily visit an Apple store or otherwise spend wads of cash on a smartphone, Gold said.

"It wouldn't surprise me to see Wal-Mart carry the iPhone, the question is which one," Gold said. An iPhone priced in the $99 range would sell well at Wal-Mart, Gold said.

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The iPhone could see competition from T-Mobile's G1 touch-screen phone that includes Google's Android platform, which Wal-Mart started selling in November. However, the G1 has a different interface and isn't as renowned as the iPhone.

"One reason people buy iPhone is because it's Apple. It has to be wonderful," Gold said.

The IDG News Service is a Network World affiliate.