Apple iPhone for $99 at Wal-Mart? Hogwash on Aisle 7

Rumors were running rampant that the iPhone was going to sell at Wal-Mart for less. They couldn't be more wrong.
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Updated from 3:42 p.m. EST

And so now they tell us.

Apple's

(AAPL) - Get Report

iPhone will sell for the regular price at

Wal-Mart

(WMT) - Get Report

or, to be precise, a couple of bucks less than you can get it directly from

AT&T

(T) - Get Report

or Apple. Only problem is just a few weeks ago the business media was full of busy telling us about how the iPhone would sell for $99 at Wal-Mart -- 100 bucks less.

Well, that's not the only problem.

First, let's review what we were fed a few short weeks ago. Look at this representative headline from the

Mercury News

:

"iPhones coming to Wal-Mart; maybe for $99."

Well, uh, maybe not. But the lead dug in deeper:

"Apple's red-hot iPhone will soon be available at what might seem an unlikely place: your local Wal-Mart. And you might see it there at one of the store's legendary

"Everyday low prices -- "$99."

Same went for a

Bloomberg

story entitled:

"Apple to Sell iPhones in Wal-Mart Stores This Month,"

and, of course, we soon had reports -- like one from

Fox News

(NWS) - Get Report

-- picking up on the "reporting" from the

Mercury News

and

Bloomberg

to play echo chamber to the "coming news." Here is Fox's headline, which helped solidify the rumor:

"Wal-Mart may soon start selling a $99 Apple iPhone, according to several reports."

And you can really forget those maybes with Fox, which saw fit to run with this quote:

"A $99, Apple-branded cell phone is inevitable," Kaufman Brothers analyst Shaw Wu said. "One of the key things Apple needs to do to drive broader iPhone adoption is to build a more complete product line."

Inevitable?

Well, let's go to this weekend's

Mercury News

. Remember, it was one of the publications that helped start the rumor. But here's its unapologetic lead, debunking it:

"Wal-Mart on Friday confirmed one of the worst-kept secrets in technology: It will begin selling Apple's iPhone on Sunday. But the retail giant officially knocked down one other rumor that had been making the rounds: It won't be selling a special 4-gigabyte version of the iconic phone for $99."

The

Mercury News'

excuse for pushing the rumor comes much lower:

"A Wal-Mart employee seemed to substantiate those rumors when she told the

Mercury News

earlier this month that the company would indeed sell such a device. No other Wal-Mart employees the

Mercury News

spoke with at the time were aware of such a plan to sell a $99 device."

A Wal-Mart employee? This, mind you, was a

store-level manager

.

Look, when the business media make a mistake like this, they won't point out that they were horribly wrong, then take a step back and analyze why. That's a shame because it's always the why that helps you, the savvy investor, figure out how business and finance work in the long run.

As The Business Press Maven just got through

pointing out

, Apple is a company that plays future product releases close to the vest. The only company that keeps secrets as well is Wal-Mart. Don't you think these two companies, working together, would do better than let a single store level manager let a secret out of a bag? Moreover, unless you are a total thicko when it comes to how business works, you have to realize that when two companies are launching a product together, there are competing interests at play.

Did it ever occur to the business media that Wal-Mart might love the idea of a cheaper iPhone, but it made no sense to Apple to sell the same phone for $100 less than it does in an Apple store? And when the business media saw that they overlooked this, why not fess up? Say you blew it and tell why and, for the benefit of the savvy investor, explain what you learned. This would have a direct impact, for example, on articles built on rumor about Apple's upcoming

Macworld

, right? Reminded once again of how the business media messes up coming Apple product stories, you'd be less apt to believe the next one you read in the lead-up to the Jan. 5 meeting, right? And what about the next time you read some sure-fire story about a product release by two companies with different motivations? If the story is built on the suspect strength of a low-level source in just one of the companies, are you going to believe it?

If you do, The Business Press Maven has a $99 iPhone to sell you.

Apple shares closed Monday's trading session up 80 cents, or 0.93%, to $86.61. Wal-Mart closed down 24 cents, or 0.43%, at $55.11. And AT&T closed down 8 cents, or 0.3%, at $27.86.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;

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to send him an email.