Wal-Mart Stores, Inc.
) has slashed the prices of
) iPhone 5 models in its stores. Customers can now get the 16 GB
iPhone 5s for $99 with a two-year contract, while the 16 GB iPhone
5c will now cost only $29 with a two-year contract.
Prices were slashed further from the already-discounted prices
of $149 for 5s and $49 for 5c. In fact, to compel users to purchase
iPhones from Walmart stores, it had priced 16 GB iPhone 5s for $189
and 16 GB iPhone 5c for $79 at its launch date in Sep 2013, which
was still cheaper than the original price of $199 for 16 GB iPhone
5s and $99 for 16 GB iPhone 5c.
It is gradually becoming a trend to offer discounts at the
beginning of the summer months on the latest iPhone models.
However, this one is not a running deal. The discounted prices on
the model will be permanent and will not increase with the launch
of new models. Also, this deal is available only at Walmart.
There is no specific reason for slashing the prices of iPhone
models. However, we believe that Walmart might look to clear its
inventory of unsold handsets to make room for Apple's latest and
greatest devices, as many firms expect the launch of iPhone 6 later
this year. It is rumored that the iPhone 6 will have a larger
screen and other improved features along with an upgraded processor
Walmart has been struggling of late and performed
disappointingly in all the four quarters of fiscal 2014 and the
first quarter of fiscal 2015. The company is therefore seeking new
ways to boost revenue amid macro-economic headwinds like
budget-strained customers, reductions in government benefits,
higher taxes, tighter credit and higher group healthcare costs.
The move to offer discounted prices on iPhone 5 models is surely
going to increase traffic at its stores. Walmart currently holds a
Zacks Rank #4 (Sell).
Some better-ranked retailers include
Ingles Markets, Inc.
), both of them holding a Zacks Rank #2 (Buy).
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