Anatomy of a rumor: Wal-Mart's $99 iPhone
The blogs and business wires were buzzing Monday morning with two juicy iPhone rumors: 1) That Wal-Mart would begin selling iPhones three days after Christmas and 2) That a low-end model would sell for $99.
The first, as we reported nearly three weeks ago, is true. (See Wal-Mart's post-Christmas iPhone sale.)
The second, as near as anyone can tell, is almost certainly not true – although it seems to have taken on a life of its own, most prominently in a Bloomberg.com report published Sunday evening.
On Monday morning, MacRumors reported that, based on leaked Wal-Mart training and advertising material, the $99 iPhone rumor was "unlikely." MacBlogz went further: "Based on every piece of information we’ve heard, and direct information inside AT&T, this is not happening."
So how did the story get rolling?
It started with the Boy Genius Report. a blog with back-channel contacts at AT&T (T) that have often proved reliable. In fact, the news that Wal-Mart (WMT) would be selling Apple's (AAPL) iPhone originated with Boy Genius, although the date that sales would begin was fuzzy until a Boy Genius reporter got his hands on an AT&T memo spelling out the timeline for in-store training and national rollout. (link)
The $99 iPhone rumor, although originating from the same site, had a very different feel to it. The Boy Genius report posted on Dec. 4, started like this:
"We just got a tip that in addition to the iPhone 3G actually making its way to Walmart, as we exclusively told you, there will be a 4GB model priced at $99 with a 2-year agreement. We’re not putting our stamp of approval behind this one just yet as the tipster isn’t listed in our BGR’s Guide to respected Ninjas handbook, but it does make you think, doesn’t it?" (link)
The $99 rumor got conflated with the Wal-Mart story in subsequent reports — after all, they both came from the same blog, right? — and received what was taken by some as confirmation when Shaw Wu, an analyst who follows Apple for Kaufman Bros., addressed it in a report to clients:
"While we are not sure of exact timing, we think a $99 Apple-branded cell phone is inevitable." (link)
Wu's remarks were picked up by Bloomberg's Connie Guglielmo, and by Monday they had made their way to the top of the online news food chain at Techmeme.com.
In fact, the iPhones at Wal-Mart will be sold at a discount, as VentureBeat reports and the ads leaked on MacRumor confirm: for $197 – $2 off the $199 list price.
The Boy Genius, for his part, hasn't backed off his initial report, but neither is he fully endorsing it. "Waiting for some feedback from a couple sources," he wrote in reply to an e-mail inquiry. "At this point I just don't know."
Neither Apple nor Wal-Mart would comment on the rumors.
hey Chip, does it make you feel better to be the damn English teacher. i suggest just reading the article and moving on, what an ass you are.
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Suz: For crying out loud, at least spell the name right: It's Walmart, not Wallmart, as in one "l", not two. Your lack of correct spelling and your atrocious grammar give no credibility to your posts.
Mike I try to shop at a lot of local busineses in my area. Ido shop at Target but I look at lables. I may miss some lables but I am making an effort to try and keep some money in our country. It is not easy I can tell you that, but I refuse to shop at companines that have no real social conscience. I am only one but I have principles. I will do my best to sxupport my neighbors before I will this monster of a company. I have seen first hand what they do to communities. When they moved in to our area crime went up.
Stores were forced to close thathad been open for decades, serving our communities. Wallmart undercut everyone.
I have a new iphone and use Tmobile. All you have to do is take out sim card and get one with Tmobile stuff on it. Very easy to do and don't have to use ATT. Just search for iphone hacks
If it's so bad to be an employee at Walmart those employee can go somewhere else and work. Atleast those are jobs you get an income from when lots of people don't have a job at all. Everyone who doesn't shop there because "made in China" is a fool. Everything at any big store is made there. You guys are dumb.
Suz,
Where do you shop then? Nearly every chain you can think of is guilty of the same sins, Wal-Mart is just the largest and gets the pub. If you say Target, well thanks for the laugh.
The $2 is just so Wal-Mart can say it is cheaper.
Communication, especially in the dark, is a fascinating thing.
Are you people blind. There is no 4gb $99 iPhone for sale at walmart. It's $197 for a 8gb iPhone. That's a $2 difference from what Best Buy, Apple and AT&T sell it for. So what is the big deal that's it sold at walmart? And why would people flock to walmart to save $2. You still have to be on AT&T to get one. You can't just go in and buy it without signing a 2 year agreement with AT&T. People didn't make this much of a case when it was being sold at Best Buy. No different at walmart but a couple bucks cheaper.
WOW listen to all the sour people who bought their Iphones for hundreds of dollars. I mean come on you don't want Iphones sold at Walmart because you believe that their shoppers are beneath you. Suck it up It'll be free with activation come summer.
Kris, all one has to do is good the EPA, Wallmart and the evidence is right there, and that just for the USA. People in other countries are working in sub-standard circumstances and livinf like slave to make cheep toys for Wallmart.
BTW, I wouldnt bye any milk prodcuts from China, ot painted toys containing lead. Ooohh and what about pet food that kills your pet. I want nothing from China. All connected to Wallmart in one way or another.
I have watched while they go into a community and cause the shut-down of local buisneses by undercutting all pricing. After they have sucked a town dry, they up & move.
Here in Georgia They pay so little and do not allow most employees to get full benefits by not letting them work a full 40hrs. And then they teach them how to get government sponsered medicad and they pay almost no taxes.
Yea, I do know that of which I speak. Do a little research. I have not shopped at Wallmart in the last 10 years and I will not do so ever!
"lowest of the low"? "The enviroment of which they are nortoris or for polluting"? Sister, do you even know what you're spouting off?
Everyone has this big hate-on for Wal-Mart but isn't it strange how other big-boxes like Home Depot seem to be immune. It seems everything is made in China these days, and many products "necessary" in today's consumeristic society are simply not made in the USA.
It isn't fair that some people work hard and can afford an iPhone while others don't work as hard or are not as good at a well paying job and cannot afford them. I hope Obama helps with this and spreads the iPhones so that everyone has an iPhone working or not. Think of how much it would help the economy if he put a "free iPhone" coupon (paid for by the government's funny money) under everyone's Christmas tree. He can then follow up with a free flat screen TV for MLK Day, a new GM car for President's Day, a free landscape makeover for Ground Hog Day and go on for ever. It is only fair that everyone in America gets access to such basic necessities in addition to taking care of bad mortgages and poorly run businesses.
Iphones are fine, but you have to be on AT&T service, which is annually rated at or near the bottom in coverage in every part of the country by JD Power and Consumer Reports.
I would not purchase 1 single item at Walmart ever! They are the lowest of the low. Sure prices are cheap bt at what cost to children and workers who's management treats them as chattle.
Then there is the cost to the enviroment of which they are nortoris or for polluting.
I now go out of my way to purchase American made products. We have to get back to supporting our own people and stop the influx of inferior products from countries that don't even value human rights.
"Why should IPhones be made affordable to everyone? I think a $99 Iphone is a bad idea."
Elitist a little? What's wrong, are you afraid you won't look as chic with your overpriced toy because too many 'commoners' will have them?
Wow, folks around the world are as stupid as folks right here in America. It gives us that warm fuzzy feeling, sorta, doesn't it? It's nice to see that the world is filled with morons.
Now that lots of comments are sidetracking us to manufacturing, I would say let us build more in US, there is only so much StarBucks coffee we can sell to each other. We obviously need more manufacturing in US, we cannot be strong without a good manufacturing base.
We have built new economies in India and China sourcing products and services from there. Thank you for that – India has benefited enormously from this – this is our way of rewarding a secular democracy. But as an immigrant with kids who are naturalized citizens in US, I wonder if our kids will do when they grow up… if we continue on this path.
I'm not bashing foreinger's like the person had stated earlier, but guys; in Canada the 3G iphone requires 3yr contract, Now Please Review our data plans,
$15 for 2mb, $25 for 500mb, $30 for 1GB and $60 for 3GB, thats per month with absoloutley no unlimited option. Please don't complain about the price and plans there.
Foriegners that take the time to write articles slamming the United States for everything that is wrong makes me laugh. It is clear you guys are so jealous of our country you cannot see straight. You hate us because we can be fat, lazy, and dumb, yet still have all the luxury items that you wish you had, while we scream for more and lower prices. Sorry your country does not measure up, and I don't have to know you exact country to stand by that statement.
IPhone = rip off for people that have to have a name brand. Samsung Behold and others are better and could be had for less (especially with a contract).
I think Target would be a better venue to further release Apple products. There is a HUGE difference in shoppers of Wal Mart and Target in regards to education and technical savvy.
"Why should IPhones be made affordable to everyone? I think a $99 Iphone is a bad idea."
Wow … don't want you to rule the country anytime soon. Because let's pharphrase what she really said;
Let's keep everyone in a caste system, because the "lessor" people should never ever be like or have anything like the "greater" people and no, I am not even going to attempt to give a reason why this should be so. I should be just because I said so. And that's that.
Did I interpret you well enough roxanne? There are so many words I could say right now but they would just get censored.
And did you notice how it asks for "Name, City and State". So I guess your also Roxanne who lives in Ad in the great state of Ams? … well I may have not put a state but I could atleast put what province (grab a dictionary girly) there instead of my last name.
the $99 iPhone is for all the of those that love to stampede at walmart….those looking for bargains……..
cough
Missy,
Clinton signing a trade agreement, I suppose you refer to NAFTA, did not send jobs overseas… as there are none separating the three North American bordering countries involved.
This is about a $99 iPhone and Wal-Mart… You sound anti-Clinton, possibly Republican… If so, stick with BlackBerry and leave the iPhone to the cool folks…
Whether an iPhone is sold at $99 dollars or $990 dollars there will be people out there that will by it. Who cares if WalMart starts selling it. AT&T will still profit because they are requiring that everyone iPhone activated have the $30 dollar per month data package.
"made in america" is a delightful term. One could argue that globalization was made in America.
Look, where are your economic fundamentals?
If you buy stuff that is american made when you can get the same article cheaper importing it, are you not responsible for perpetuating the misplaced deployment of capital in the market?
This is not a trite issue. It is fundamental to where your great country is headed just now.
Just now you guys (collectively) are suggesting that your children should have no money to invest in their new ideas, in order that the same people who have run your auto industry into the ground can continue with their failed ideas.
Now, what if that had been done when microsoft or Apple was born? What if Steve jobs and Woz, and Billy the kid, what if all those guys could never have started Apple and Microsoft BECAUSE OF THEIR TAX BURDEN?
Where would you be now?
You'd be paying royalties to foreign state so that you could use THEIR advanced technologies in order to prop up your failing, socialist model of an economy.
That bank bail out was treason, because it was consciously designed to destroy the economy of the nation in order to hamstring the democratic government. Remember who wrote it, who promoted it, and what else happened at the same time.
Hint: At the same time as the major funding partners of the GOP (the corporate investment community) stopped contributing to McCain's cause (ie when they gave up the election as lost), these very same corporations held the country to ransom, demanding 700 billion or they would send the economy into devastating depression.
That strikes me as treason. Treason against the people, treason against the interests and security of the nation. I think your founding fathers would have dragged Paulson, and his crew of insanely wealthy shareholders, out into the street, and hung them as traitors.
But, you know, it is your party. The rest of the world is watching with curious interest.
99$ 4 an iPhone wow! …… like if that were possible I mean these people make up the stupidest things these days
Um, I love the double standard you Americans have. Sure, buy American, buy American, but you still want everbody else to buy your death cigarettes and poisoned food. I still remember, when some of us in Canada, got sick from Strawberries from the States. You see, you were using sewage water to water your plants. Well, that is what underdeveloped countries that can't even provide health care do.
rHey Rob from NYC, NY- My best friend was born and raised in the Bronx and he shops at 1 of the 3 Walmarts here 3-4 times a week – along with my other lawyers and physcian friends. Get a life man, do you know of any other store that had larger post-re sales? No one did! You're not so special.r
How exciting! A new phone will surely change the lives and fortunes of the mullet crowd! Only $99 for the phone, and $99 per month in perpetuity should greatly help the finances of the folks who shop at Wal-Mart
Well Madmilker I think you got it wrong. What got this country in the mess they are in 1 is greed, 2 is Clinton signing the Free Trade Agreement and sending all of our jobs overseas.
The rumors of a cheap iPhone were started by Troy Wolverton, who has in the past tried to freeze Apple sales with rumors of pending price cuts. I mean, who'd buy something now, knowing that the price is going to be halved in the near future, right? Well, that's Wolverton's game, and he's part of Jim Cramer's gang of misinformationists. These guys should be investigated by the SEC.
iPods only sell a few bucks cheaper at Walmart, Sams Club, BJs, Costco, Target and the like. The rumor of a cheaper iPhone is just that, a stupid rumor.
To Madmilker, I agree with what you said… this country is doomed if we do not produce or manufacture here. Its as if the government has a different agenda… it cares more about the economy of foreign countries. By the way, Hersey will no longer be using milk chocolate in their Hershey bars… another reason to not buy an American made product.
Shaw Wu: “While we are not sure of exact timing, we think a $99 Apple-branded cell phone is inevitable.”
It doesn't say iPhone. It says "Apple-branded cell phone". Pretty generic comment.
In fairness, there is absolutely nothing wrong with Shaw Wu's comment “While we are not sure of exact timing, we think a $99 Apple-branded cell phone is inevitable.” He even admitted that he's not sure of the exact timing.
The facts are obvious… AT&T and Apple at a discount? Those two companies dont know the word discount. More like the word rip off.
I hope that walmart knows that they will be facing large lawsuits following the deaths of some shoppers the day the iphone comes out, look below at Sal, Jericho, NY's comment and you will realize that mabey they should sell it online or if they sell it in the store, they should have alot of security, mabey just make a long line and keep it in check, first one there first one to tend!
"There’s only two companies that are American and sell phones – Motorola and Apple"
I've never closely examined an iPhone to see where it's made, but iPods are definitely ALL assembled in China. Designed in Ca…. but assembled in China is basically MADE IN CHINA.
Congratulations on a very well written piece.
A $99 4GB iPhone doesn't make much sense. There's not alot of price diff between 4GBs and 8GBs of memory – Apple would also have had to heavily cut their margins – and why do that in year #1 3G iPhone?
-Andrew
"well…they sold out America"… what the heck are you talking about? Show me one cell phone that's made in USA and I'll buy it. There's only two companies that are American and sell phones – Motorola and Apple. The rest are foreign and they all make cell phones in China. Seriously, show me some made in USA phones…there's none. I agree with buy usa products. When you go into wal mart or target you have a choice. we just bought crayons for out kids and had a choice between $.79 chinese and $1.39 Crayola – we always pay for the USA product but in cell phones there is none. Apple is an American company that designs their products in Sunny Cali. Nokia, Samsung, LG, sony siemens… are all foreign. Again, they all make their cell phones in China – no way around it.
In a related news, HTC plans to up the production of TMobile G1 to 1M in 2008 – make you wonder what happened to the 1.5M pre-orders reported by serious news outlets (also originated from blogs).
It shows you how reliable the blog world is.
well…they sold out America…why not another foreign phone…
People in America need to realize jus what got America in this shape…"cheap" yes so-call cheap items from a foreign land.
quote*Wal-Mart firmly believes in local procurement. We recognize that by purchasing quality products, we can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in our stores in China is sourced locally. We have established partnerships with nearly 20,000 suppliers in China. *end quote!
Now! if there be 182 country's making items for the world to buy and they have only 5% of the pie in China…duh! This company makes the nice people of China support their currency(yuan) by keeping it in their country working for the people there…. but with the "yuan" going up in value and the US dollar going down…all the foreign items that the American consumer buys thinking it is cheap has went up in price.
People…its all about the currency and to keep a currency strong you got to keep it floating around the country you live in so it can work for you. For the past 12 years all them US dollars are being shipped overseas to a foreign bank and with the American worker not making anything for the foreigner to buy the "we the people" have to turn to the "second" largest employer in America(Uncle Sam) to sell "we the people" debt in order to get all them dollars back!
50 years ago a foreigner would had given their left nut for a US dollar or a Hershey's chocolate bar and today the same foreigner has got Uncle Sam and the American consumer by both all the while Hershey is moving the chocolate factory to Mexico. Wake up! America and think "MADE IN AMERICA.
Shaw Wu: “While we are not sure of exact timing, we think a $99 Apple-branded cell phone is inevitable.”
That tells us didley-squat! I predict the iPhone will eventually sell for $69. Maybe 4 or 5 years?? Maybe 10 years (need to adjust for inflation)
Just remmeber – you heard it frist from jmmx!
Boy Genius ain't too bright. He may also be a bit of a market manipulator along with Wu and Eric Savitz.
Suz… you did not do any research you just watched the documentary about walmart.