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May 25, 2010

Starting today, Wal-Mart says it will reduce the price of Apple’s iPhone 3GS by $100.

The new iPhone 3GS will now retail for just $97 with a minimum two-year activation contract.

The price drop lends further evidence to rumors that Apple could be set to launch a new wireless device next week at an upcoming Apple developers conference in San Francisco.

The new lower price undercuts the $199 AT&T Mobility and Apple in their own outlets as well as the $99 AT&T Mobility is currently charging for the previous 3G 8GB model.

Recently, Apple noted that the publication by an online site of information and pictures of a missing iPhone prototype thought to be of the next-generation device could cost the company as consumers could put off buying the current model in anticipation of the new model.

Wal-Mart began selling the iPhone in October 2008, offering the 3G 8GB and 16GB models for $2 less than the going rate at other retailers.

Although it was just a $2 price drop, it was seen by some wireless industry analysts as significant since Apple has historically held retail partners to strict pricing rates on newer devices.

As of this morning, there's still no word yet if other iPhone retailers will match Wal-Mart's latest price cuts.

Earlier this month, Apple said it has definetely narrowed the gap between the iPhone and the BlackBerry.

And this is heating up a fight that's been raging on for the past few months, in a quest to become the world's largest seller of smartphones.

And Apple's first quarter numbers are up a full two percentage points on the 14.4 per cent share it scored for last year as a whole. Apple now commands 16.4 percent of the global smartphone market share, and that market share is rapidly increasing.

But for its part, RIM's market share is still the same, at 19.7 percent, stagnant from last year.

Year on year, it was effectively static as well, falling a fraction of a percentage point from the 20.3 percent share it achieved in the first quarter of last year.

On the other hand, Apple's iPhone saw its share grow from 10.6 per cent in the same timeframe.

But so far, neither company is yet able to challenge market leader Nokia, which recorded a Q1 2010 share of 40 per cent, up from 38.2 per cent in Q1 2009 and 38.8 per cent for 2009 as a whole.

According to market researcher Strategy Analytics, Apple accounted for 16.4 per cent of world smartphone shipments in Q1 2010 - just 3.3 percentage points behind RIM.

So there's really no question that the battle is intensifying.

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Source: Wal-Mart Inc.