January 31, 2005 6:45 PM PST

Wal-Mart has an ear for iPod market

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Wal-Mart Stores has quietly begun selling Apple Computer's popular iPod Minis in select stores, the mega retailer's first big move into the market for the enormously popular digital music players.

The discount chain is selling Minis in a "limited number of stores," a Wal-Mart representative said Monday. The representative declined to elaborate on how many of the company's nearly 5,000 stores are carrying the device.

The Mini is one of the few Apple products the discount chain sells, but that may soon change. The companies are rumored to be working out an agreement for Wal-Mart to begin selling the iPod Shuffle, a music device Apple unveiled last month. A report on enthusiast site AppleInsider speculated that Wal-Mart may order as many 250,000 iPod Shuffles.

Neither company would comment on the report.

In any case, the addition of Wal-Mart to Apple's list of retail partners would expose many more consumers to the product and likely lift Apple's sales. Up until now, the world's largest retailer has largely stayed out of the market for Apple products, which typically forgo affordability in favor of sleek design.

"Apple's just about the only PC company that hasn't tried to sell stuff to Wal-Mart," PC Data analyst Stephen Baker said.

Analysts said the partnership is probably a smart one for both companies but noted that the two make strange bedfellows. In addition to different corporate images, the companies diverge on price strategies. Wal-Mart prefers to undercut the competition, while Apple frowns on any discounting that would undermine sales at its own high-style Apple stores. And Wal-Mart's own online music store features music downloads in a Microsoft format that competes with Apple's.

"It's kind of odd," said Toni Duboise, an analyst at Current Analysis.

Apple has worked in recent years to significantly boost the number of places where iPods are sold. In addition to traditional Mac sellers like CompUSA, Apple added places like Target and Best Buy. Perhaps the biggest move was to allow Hewlett-Packard to resell the iPod. That has added a whole other crop of iPod retailers, including Radio Shack and office chains like Staples.

Apple has also started selling gift cards for its iTunes Music Store in places like 7-Eleven and Circuit City--a former Mac retailer that has also started selling iPods.

Walmart.com, the company's separate online unit, already sells a variety of iPod accessories and the HP version of the iPod.

5 comments

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Apple Computers may be going for it after all
Whoops! A Linspire could have hooked up with a PC hardware company and beaten Apple to the punch on this one, but it does look like Steve Jobs is setting his sites on getting an Apple computer/entertainment center in every home in America after all. You don't have Walmart sell your stuff unless you're gearing up to sell tens of millions. Watch for the (calculated) fifty per cent price drop in the coming months "to clear inventory" for some model witha cosmetic or insignificant "upgrade", followed by the stampede.
Posted by kakman1 (50 comments )
Reply Link Flag
Good Thing
While those of us who live out on the coasts might sneer or lessen the imprtance of WAl-Mart - in middle America, in lots and lots of places, Wal mart is the ONLY store over 2,000 sq ft in a couple hours drive so while we get to drop by the Apple Store or even go to MacWorld - in lots of places, it's all words and photos so it's important to physically touch it and they also trust Wal Mart.

Apple can get around the discounting thing by bundling a $3-$5 itunes music store discount card special for Wal Mart - makes WAl mart happy also by offering an exclusive and who can stop buying tracks after three?

The Mac Mini is also perfect for those desolate Wal mart's in Wyoming ...
Posted by jbelkin (167 comments )
Reply Link Flag
Today at Target & Walmart, tommorrow at QVC?
iPod Mini, iPod Shuffle & Mac Mini at Target & Walmart , will
Apple shoot for budget markets with QVC & HSN TV shopping
channels tommorow?
Dell/HP/ etc PCs are doing it already on QVC & HSN, so why not
pitch entry level products from Apple as well?
No extra discounts, but maybe some custom bundles, specials,
etc?
This would definately boost sales in Middle America & areas that
are not near Apple / Apple Resellers / CompUSA's stores.
Posted by Llib Setag (951 comments )
Reply Link Flag
Walmart Drops Microsoft
What would really be something is Apple getting Walmart to join
the iTunes family by dropping their own music store. :-)
Posted by (10 comments )
Reply Link Flag
Walmart Music Store-within-a-store at iTunes?
Walmart is very conservative with their music selction at stores.
(explicit lyrics / artists/etc)
What if when you click on the Walmart Music Store it would open
a special Walmart iTunes Store (inside of Apples iTunes Music
Store Online)?
Similar to the Special Amazon Stores that are set up by Amazon
& ToysRUS, etc.
That would be cool & make MSWinMedia heat up...
Posted by Llib Setag (951 comments )
Reply Link Flag
 

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