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Wal-Mart Cuts Apple iPhone 6 Price to Boost Traffic - Analyst Blog

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Reportedly, Wal-Mart Stores, Inc. ( WMT ) has slashed the price of Apple, Inc.'s ( AAPL ) iPhone 6 models in its stores, two weeks before Christmas, in order to attract shoppers.

Customers can now get the 16 GB iPhone 6 for $129, a reduction of $50 from the retailer's usual price; while the 16 GB iPhone Plus model will now cost only $229, down from the standard price of $279. Customers will also get a two-year service from AT&T Inc. ( T ), Verizon Wireless or Sprint Corp. ( S ) on purchasing iPhone 6 from Wal-Mart stores.

In addition, Wal-Mart is offering the iPhone 5S for $49 with a two-year contract, down from $79. Samsung Electronics Co.'s Galaxy S5 is also on sale for $79 compared to its original price of $139.

Besides iPhones, Wal-Mart is also offering attractive discounts on Xbox and PlayStation gaming consoles and televisions.

It seems Wal-Mart has pulled up its socks to give its customers the best deals and is leaving no stone unturned to attract holiday shoppers. In mid-November, the company had stretched the Black Friday (Nov 28) deals over five days starting from Thanksgiving Day (Nov 27) till Cyber Monday (Dec 1), per reports. (Read: Will Wal-Mart Get a Boost from 5 Days of Black Friday Sales? ).

Wal-Mart celebrated Cyber Monday from Nov 29 through Dec 5, and offered 500 online deals on electronics, toys, apparel, home decor and more on Walmart.com. (Read: Wal-Mart to Kick Off Cyber Monday with Attractive Deals )

Wal-Mart is offering deals on hundreds of items this weekend in order to celebrate the last number-sequential date this century, i.e. 12/13/14. Wal-Mart will keep majority of its stores open for 24 hours a day and will remain open until 8 p.m. on Christmas Eve, offering customers ample time to purchase these new deals.

Wal-Mart has been struggling of late with declining U.S. comparable store sales in seven of the last eight quarters due to a challenging retail sales environment and difficult consumer spending. Low-income shoppers are squeezed between stagnant wages and reduced government food stamps.

In the recently reported third quarter of fiscal 2015, Wal-Mart's earnings came in line with estimates, while revenues were better-than-expected. The company however narrowed its earnings guidance for fiscal 2015, as the company anticipates a fierce competitive environment ahead of the holiday season. (Read: Wal-Mart's Q3 Earnings In Line, Sales Beat; View Narrowed )

The company is therefore seeking new ways to boost revenues amid macro-economic headwinds like budget-strained customers, reductions in government benefits, higher taxes, tighter credit and higher group health care costs.

The move to offer discounted prices on iPhone 6 models is surely going to increase traffic at its stores. It is also encouraging that gas prices have reduced, which should increase consumer spending power a bit. This may benefit the company and other retailers in the upcoming holiday season.

Walmart currently holds a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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