Wednesday, October 29, 2008

Wal-Mart to discount T-Mobile G1--is the target Apple?

Thomson Reuters reported today that Wal-Mart is going to discount the T-Mobile G1, the first commercially-available Android phone, for $148.88 on a two-year plan, a $30 discount from the $179 price in T-Mobile stores. The top-line news is simple: If you want a G1, go buy it at Wal-Mart, but the real target of this price cut may be Apple. Apple and Wal-Mart are direct competitors in music and video sales, and the iPhone has become Apple's revenue growth engine. If Wal-Mart can impact iPhone sales, it can put Apple in a world of hurt. Also, Apple's and Wal-Mart's stores address very different markets, so the G1 in Wal-Mart could become the iPhone for the rest of us. I'd certainly expect to see the Wal-Mart music store on the G1, and possibly a Wal-Mart shopping application.

Don't underestimate the impact of getting the world's biggest retailer behind Android. Yes, it could be completely opportunistic on Wal-Mart's part, but I think that there's some serious strategic thought behind this move.

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