Wal-Mart Stores, Inc. (NYSE:WMT) has been undercutting its competitors for better or worse for years. By undercutting “Main Street” they have effectively killed “Mom and Pop” stores all over the world. However, it must be said that they have passed that savings on to consumers and provided millions of people with stable employment. Stable might be a bit generous given its past treatment of workers with regards to wages and benefits, but stable is, well… stable. Wal-mart has seemingly gotten better of late, as it shocked many with the announcement that it would begin offering benefits to same sex couples last month.
Today, Wal-Mart Stores, Inc. (NYSE:WMT) announced that it will undercut Apple Inc. (NASDAQ:AAPL)’s price on its recently announced iPhone 5C and iPhone 5S. The retail giant will offer the five-colored iPhone 5C for $79 and the iPhone 5S for $189 with a two year contract. This represents a savings of $20 and $10 respectively on these new products.
In April, Li Lu and Bruce Greenwald took part in a discussion at the 13th Annual Columbia China Business Conference. The value investor and professor discussed multiple topics, including the value investing philosophy and the qualities Li looks for when evaluating potential investments. Q3 2021 hedge fund letters, conferences and more How Value Investing Has Read More
While Wal-Mart Stores, Inc. (NYSE:WMT) has undercut Apple Inc. (NASDAQ:AAPL) before, it’s a rarity when a retailer offers a product below the Manufacturer’s Suggested Retail Price (MSRP) before the launch date of the product. The reasoning being, of course, that you must sign a two-year contract with either AT&T Inc. (NYSE:T), Sprint Corporation (NYSE:S), or Verizon Communications Inc. (NYSE:VZ), and that Wal-mart makes a fair amount of money from these contracts.
Additionally, once they get you in the door, Wal-Mart Stores, Inc. (NYSE:WMT) certainly expects consumers who might otherwise not frequent Wal-mart to purchase additional items. It’s quite easy to suggest that the iPhones will be in the back of the store, and those seeking the deal will have to tackle a number of well thought out displays before then.
Wal-mart will also begin taking pre-orders for the iPhone 5C tomorrow. Customers will need to physically visit Wal-mart to order the handset, and will have until the 25th of September to pick it up.
Presently, no retailer is offering pre-ordering of the iPhone 5S, including the folks at Wal-mart. Wal-Mart Stores, Inc. (NYSE:WMT) is, however, offering massive discounts on the outgoing iPhones. The 16GB iPhone 5 will be sold for $79 with a two year contract starting today, putting it in an interesting head-to-head with the new iPhone 5c. The iPhone 4S will be sold at $0.98 on contract, and the iPhone 4 will cost $0.10 with the same contract, but will come with a $100 Wal-mart gift card.