Wal-Mart drops iPhone 3GS price to $97

Starting tomorrow Wal-Mart will reduce the price on the Apple (NASDAQ:AAPL) iPhone 3GS with 16 GB of memory to $97 down from $199, with a two-year contract. According to the Wall Street Journal, Wal-Mart said that the offer is part of its commitment to Apple to offer aggressive discounts on a weekly basis.

Nevertheless, the move is notable because it comes just prior to Apple's Worldwide Developers Conference, which begins June 7, where it is speculated that Apple CEO Steve Jobs will unveil the new iPhone. In the past, Jobs has introduced the latest version of the iPhone at the WWDC conference and the company makes the device available for sale either in late June or early July.

In a research note from Walter Piecyk of BTIG, Piecyk said that last year's price cut of the iPhone 3G to $99 stimulated more than 3 million phone sales to existing AT&T (NYSE:T) customers and that the price cut on the iPhone 3GS could have an even bigger impact on AT&T.  Specifically, Piecyk said that AT&T has a big installed base of iPhones that will need to be upgraded to 3GS to benefit from Apple's latest version of its iPhone OS. In addition, he said that consumers might be weary of unfulfilled rumors of a CDMA iPhone and may be compelled to sign up with AT&T in 2010.

Piecyk also predicted that Apple will sell 54 million iPhones from June 2010 to June 2011 and he expects the average selling price for the iPhone to drop to $500 by the second half of 2011.

For more:
- See this WSJ article (sub. req.)
- See this BoyGeniusReport article
- See this BTIG blog posting

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