The New iPhones Will Be a Little Cheaper at Walmart

Apple Introduces Two New iPhone Models At Product Launch
Justin Sullivan, Getty Images
If you're planning to buy one of Apple's (AAPL) new iPhones, you may want to consider getting it at Walmart (WMT). In a rare move, the retailer says it plans to sell both the iPhone 5S and the iPhone 5C at below-market prices.

The company announced this morning that the iPhone 5S, which will start at $199 at the Apple Store and all other outlets, will instead sell for $189 at Walmart. The 5C, which has a retail price of $99, will be available for just $79 at Walmart.

It's remarkably rare to see anyone dip below the suggested retail price on a marquee item like the new iPhone. Many manufacturers make retailers hew to what's known as minimum advertised pricing, preventing them from advertising that undercutting the competition and devaluing the product.
It's why discount retailers will sometimes refuse to show you the price of a product in their circulars, or why some online retailers refuse show you the price until you put an item in your shopping cart. It's also why retailers like to offer package deals on certain items during the holidays -- they're not allowed to discount the Nintendo system, but they can certainly offer the Nintendo system bundled with a free video game or a gift card.

As far as we know, Apple also has a minimum advertised price deal in place, so it's unclear how Walmart managed to get around it to charge less. It may just be a matter of Walmart throwing its weight around -- its status as the world's largest retailer gives it a lot of leverage in its dealing with suppliers, so perhaps Apple made a special exception.

Whatever the case, it's a win for Walmart shoppers. But it should be noted that this is a relatively modest discount, especially on the 5S (just 5 percent). And it looks even more insignificant when one considers the true cost of the phone: Add in the $90 or so a month for the bare minimum plan on Verizon (VZ), and you wind up paying upwards of $2,300 over the two-year contract. In that light, a $10 discount suddenly seems pretty paltry. Still, that's $10 you're not getting anywhere else.

The phones will go on sale Friday, Sept. 20. But if you wait a day, Walmart will let you trade in your old phone starting Saturday and put that value toward your purchase, which brings down the effective price even further.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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