This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Does Apple Let That Dump Walmart Discount iPhones?

Stocks in this article: AAPL WMT BBY TGT

I haven't been able to get a definitive answer, but let's assume (I think safely) these third-party arrangements look like this.

Apple sets a minimum sales price that Walmart and others must abide by. That almost certainly has to be the case. I would hope that Apple also controls the ability for these third parties to discount. In other words, Walmart didn't come up with the idea to sell the new iPhones for $10 less than everybody else (with a two-year contract) on its own. They either came up with it and Apple approved or it was some sort of joint decision. If Walmart has carte blanche to discount, which I doubt they do, we really have problems.

Particulars, however, are irrelevant. No matter how it comes to be, it's bad for Apple. And it's not a numbers thing. Even if Walmart eats that $10 discount, who cares? It's not about the money. In fact, I would be willing to give up the revenue these relationships generate (I haven't seen a reliable breakdown of Apple retail sales via third parties) to protect and rebuild the part of Apple's image that has eroded.

Again, no skirting the issue with euphemisms and niceties.

Fair or not, elitist and snobby or not, Walmart is the butt of too many jokes. There's not a soul in this audience -- or any other for that matter -- who hasn't made a joke about everything from the Walmart experience to some of the people who frequent the place. Walmart has built its brand on being the place to get cheap stuff. Everybody likes a bargain, but Walmart took the notion to an extreme. This is the place people load up on the staples when they get their check at the end of the month. It's well-chronicled in pop culture.

Maybe it's urban myth. I don't know. But, as we discussed earlier this week in Apple Laughs When it Realizes Google Makes Computers, perception equals reality and it is reality.

Why Apple wants to be as close to the bottom of the retail barrel as you can get -- short of selling stuff at a swap meet or flea market -- is beyond me.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.
2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs