Apple 2.0

Covering the business that Steve Jobs built

Yes Virginia, there is a $99 iPhone

December 27, 2008: 10:11 AM ET

$99 iPhone saleAT&T (T) on Saturday began offering refurbished iPhones for the lowest price yet seen in the United States:

  • $99 for a black 8GB iPhone 3G (refurbished)
  • $199 for a black 16 GB iPhone 3G (refurbished)

The price points are not entirely unexpected. For several weeks before Christmas, Apple (AAPL) blogs were buzzing with rumors that Wal-Mart (WMT) would be selling a new version of Apple's iPhone at the magical $99 price.

But it was not to be. On Friday, Wal-Mart confirmed that starting Sunday, Dec. 28, it will carry the hot-selling phone at nearly 2,500 stores -- but starting at $197, not $99.

AT&TS's $99 iPhones are the same old models, slightly used.

According to the small print on att.com,

Refurbished phones are previously owned devices that have been unused or lightly used and returned during the 30-day trial period. Each refurbished phone is independently quality tested and loaded with the latest software to meet current factory standards. Some refurbished iPhone 3G devices will have minor scratches.

Refurbished iPhone 3G devices carry a warranty of 90 days or more. For details about the warranty on your refurbished iPhone 3G go to www.apple.com/support/oss/.

The catch? The heavily discounted phones come with the usual 2-year contracts, which can cost up to $2,000, depending on the plan.

The sale ends Dec. 31 or when AT&T runs out of stock, whichever comes first. Macworld Expo starts the following week, leading to speculation that AT&T may be using the occasion to clear inventory in advance of new models or new memory configurations.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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