Rumor: Wal-Mart to Sell 4GB iPhone for $99

The telecom space is buzzing after an online gadget community reported that Wal-Mart is slated to sell a 4GB iPhone (News - Alert) for $99.

Citing unnamed sources, The Boy Genius Report, or “BGR,” a 2-year-old Web site, says it received a tip that the model will include a 2-year agreement. Right now, Apple (News - Alert) sells 8GB and 16GB iPhone models for $199 and $299, respectively. Last year, a 4GB of the first generation iPhone was briefly sold for $399, but quickly discontinued.

“Now, we all know Apple dropped the 4GB iPhone from its initial line-up, but that was at a $399 price-point,” BGR says. “4GB is certainly enough for some songs and short 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.”

An Apple spokesperson reached by TMCnet declined to comment saying, “The company does not comment on rumors.”

Regardless on whether or not Apple wants to respond the fact of the matter that the rumor is loose and people are talking about it should give Apple something to think about. Although, Apple is not doing poorly due to their already popular iPhone and iPod models, still, it doesn’t hurt to make some extra dough.

The BGR’s report follows a prediction by one writer for the Web site, Zach Epstein, who correctly predicted several months ago that Apple would move away from its online-centered retail model and get national retailers involved in iPhone distribution.

However, rumors of Wal-Mart selling smaller iPhones or iPhones in general are not entirely new.

As AppleInsider.com reports, BGR last month cited an internal memo announcing “that Wal-Mart has reached agreement with Apple to offer iPhone 3G in Wal-Mart and Wal-Mart-managed Sam’s Club Connection Centers nationwide beginning December 28, 2008.”

About 2,500 Wal-Mart locations and 69 Sam’s Club locations that use the discount chain’s ordering system are expected to sell the device, according to AppleInsider.

“Training for Wal-Mart employees is believed to have already begun,” the Web site reports.

Though it’s just a rumor now, some – such as analyst Matt Rosoff, writing for CBS Interactive-owned CNet – say the $99 iPhone from Wal-Mart is a good idea for Apple.

Slashing prices to get into a commodity market is a good way to break down the competition – witness the sub-$500 notebook, says Rosoff.

The iPhone touch screen, Rosoff says, with sophisticated user interfaces, large displays, and the ability to run multiple types of computer-like applications, are used mainly in the business world now.

“If Apple can compete aggressively on price now, it could dominate the consumer smartphone market, just as it dominates the MP3 player market today,” Rosoff says. “Once that happens, all sorts of interesting long-term revenue possibilities open up – App Store revenue could become significant with 50 million iPhones out there, not to mention upgrade cycles, attached devices and services, and the halo effect on Apple’s other products.”