Friday, May 28, 2010

An iPhone 3GS For $97?


A surprising deal on the Apple iPhone 3GS has just been announced at Walmart.  The 16 GB version is currently available for $97.  It's interesting that this deal is announced just days before the Apple Worldwide Developer Conference on June 7th, indicating that new models will be announced hence the older models will be sold at reduced prices to clear inventory.  

But why is Apple doing a deal with Walmart and will a lower end retailer tarnish its image?  Quite simply, if you have an excess of inventory, a retailer the size of Walmart (bricks and mortar as well as online), has the capability to push lots of sales across the country.  And even though the next 4th Generation iPhone will be available soon, the price tag puts it out of most people's budgets.  However, at $97 there's a very big lower end market potential that will continue to feed Apple with more customers - call it a market seeding strategy that will pay off in the long term with upgrades and iPad and MacBook sales.  

It's no wonder that Apple surpassed Microsoft this week to become the world's biggest technology company in terms of market value.  Apple's value is now at $222 billion compared to Microsoft at $219 billion. Apple is about consumer, stylish products whereas Microsoft continues to be about Windows.

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