$99 iPhone deal changes hands

I'd previously posted that Walmart was going to start selling a 4GB iPhone for $99. Not happening, anymore.

Walmart won't have the $99 iPhone. Now, the iPhone deal will come directly through AT&T. And it's not such a deal, afterall. AT&T will sell refurbished 8GB phones for $99, with a 2 year AT&T contract ... until they run out of stock. AT&T defines refurbished as "previously owned devices that have been unused or lightly used and returned during the 30-day trial period."

AT&T will also sell a 16GB iPhone for $199. This will also be available only until AT&T runs out of stock.

Walmart's iPhone deal is - $197 for the 8GB iPhone, with a 2 year AT&T contract. That's only $2 cheaper than what AT&T offers its customers. In doing so, Walmart joins a short list of iPhone official retail outlets, which also includes Apple stores, and Best Buy.

source: AT&T Steals Walmart's IPhone Thunder: The Carrier, Not the Retailer, Is Selling the Handset for $99, Advertising Age, By Rita Chang, December 29, 2008

Walmart Revitalizes the Eagles, Journey, AC/DC

In this photo from Walmart, AC/DC fans Bill Voccia, left, and Andrew Lawrence, right, try their skills playing the new Rock Band 2 video game as part of Walmart's pre-release event of the new AC/DC album Black Ice, in New York's Union Square, Thursday, Oct. 16, 2008.

Huh. This is very interesting.

Walmart is looking at its catalog, to see which artists with big hits from the 70's and 80's, still sell well at Walmart. Then the company is pursuing those bands, who many consider as past their prime, to see if the bands will agree to launch new albums as Walmart exclusives. The first deal was with Garth Brooks in 2005, and has expanded to include the Eagles, Journey, and AC/DC.

"These are bands that have lots of loyalty with our customers," said Greg Hall, Walmart's VP-entertainment, said. "And even though they maybe hadn't done a new studio album for a few years, we look at: How does their catalog business sell in our stores? How does the brand translate to other merchandise like apparel? And all of these acts that we've done [deals with] have a real day-to-day strength in our stores."

"We've been in conversations with lots of acts and are still in conversations with lots of acts," said Mr. Hall. Walmart won't say how many, or which bands.

Interestingly, the revival deals have been "more of a coincidence than a strategy to be honest with you," Mr. Hall said. Jeff Maas, divisional merchandise manager for music and movies at Walmart, said those bands happened to be the ones easiest to work with and the most open to the direct model.

Plus, Mr. Mass admits that the exclusive deals have become a "good business model for us." "They tend to drive excitement into our stores. They keep our stores new and fresh. And so you'll see us do more."

Walmart has the stats to prove it. The latest results include a chart-topping 784,000 opening-week sales of AC/DC's "Black Ice" in October and more than 3 million sales overall for the Eagles' 2006 release of "Long Road Out of Eden," according to Nielsen Soundscan.

Additionally, the exclusive deals are boosting electronics sales - iPods, MP3-capable mobile phones ... and even video games 'Guitar Hero' and 'Rock Band.'

Walmart says that the bands, win, too. Walmart can merchandise a wide array of apparel and other related products in major in-store events, helping promote concert tours and move products beyond CDs in ways no other retailer could. Also, the in-store displays are viewed by 130 million shoppers each week. Plus, Walmart offers the bands good marketing support. For example, for the AC/DC launch in October, Walmart threw in a deal with Clear Channel - to run a Walmart ad for "Black Ice" after each time one of the songs was played on a radio station, as well as a mobile tour featuring "Black Ice" ice-cream trucks in markets such as New York, where Walmart doesn't have a presence.

Walmart says consumers also win - album prices are well below the industry standard for new releases, such as $11.88 (with free shipping when bought online) for AC/DC's "Black Ice."

Why does this work? According to Mr. Hall, despite music industry troubles, "consumers have never loved music more nor wanted to interact with music more." "It's one of the most emotional products in our store. ... I think because customers are so passionate about music and consuming it differently than in the past that both artists, artist-management labels and distribution companies are looking at retailers to try to help them figure out what are some ways we can do things differently."

He's willing to concede that some bands might be better suited to one of Walmart's competitors as an exclusive. But as long as retailer exclusives are a way of life in music, he said, "we'll be in the thick of it."

source: Walmart's Revivals of AC/DC, Others Are Reviving Music Industry: Exclusive Deals With Bands Have Created Successful New Business Modelby Jack Neff. Advertising Age. Published: December 11, 2008

Implications of a $99 iPhone

The current iPhone is 8GB, and $199, plus a 2-year AT&T contract. The newest version of the iPhone is 4GB, and $99 ... at Walmart.

This makes sense --

A recent ComScore study showed that even though 43% of iPhone owners earn $100,000+ annually, iPhone adoption since June 2008 grew 48% among those earning $25,000 - $50,000 annually, and 46% among those earning $25,000 - $75,000 annually.

Advertising Age suggests that the halo effect is important, here - what the iPhone can do for Apple computer sales, and what it can do for Walmart.

(Walmart declined to comment. But to be sure, the retailer saw what the iPhone did for the AT&T brand. "It has made [AT&T] hipper and relevant, so you could easily see that Walmart is hoping for the same thing, to get some cachet into its brand. It's not the coolest place in the world to go shopping. If they can infuse some youth and energy [with] the iPhone, it's a great idea," said Karl Barnhart, a partner at CoreBrand.)

source: Walmart is Set to Sell a $99 iPhone: Experts Say Mass Distribution Won't Tarnish Upscale Brand, by Rita Chang, 12/8/08, Advertising Age.

Even more interesting, is what this will mean for marketers who are looking to include handheld devices in their advertising campaigns, and for start up's who design (and sell) iPhone applications ... nevermind, what will happen to old cell phones. Ah, the implications of a world full of iPhones!! So interesting!

Check out this video from CBS - Jim Puckett and Scott Pelley walk through Guiyu, China. The town has developed into a dumping ground for toxic e-waste.