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UBS doubts $99 iPhone rumor

UBS believes Wal-Mart will probably just serve as an additional source for the $199 iPhone. UBS believes Wal-Mart will probably just serve as an additional source for the $199 iPhone.
Bloomberg News / December 9, 2008
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SAN FRANCISCO - Apple Inc., reportedly planning to offer its iPhone in Wal-Mart Stores Inc. this year for as little as $99, is unlikely to sell the phone for that low a price, UBS AG said.

Wal-Mart would probably serve as an additional source for the $199 iPhone, rather than ushering in a new discount strategy, UBS analyst Maynard Um said yesterday. Still, a $149 stripped-down model may make sense, he said.

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

A partnership with Wal-Mart would bring the iPhone to the world's biggest retailer, building on a deal Apple made in September with Best Buy Co., the largest US electronics chain. Employees in the mobile-phone departments at five California Wal-Marts said the chain would offer iPhones by the end of December. Workers are being trained to sell the device, they said.

Before the Best Buy deal, the phone had only been sold in the United States by Apple and AT&T Inc., which provides wireless service for the device.

Apple spokesman Steve Dowling wouldn't respond to the report and said the company "does not comment on rumor or speculation." Wal-Mart spokesman Dan Fogleman said his company hasn't made an official announcement on an iPhone offering and had no comment. AT&T spokesman Mark Siegel declined to comment.

Apple, AT&T, and Best Buy sell 8 gigabyte and 16 gigabyte models of the iPhone, which combines a handset with Apple's iPod digital media player. Apple stopped selling a 4 gigabyte model in September 2007 after chief executive Steve Jobs said customers preferred versions with more storage.

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