Holiday shopping for hot items at a bargain price took on a new form this week as rumors flew on the Web about a 4GB iPhone to be available at Wal-Mart for $99. That phone was initially to be rolled out at a $399 price tag.

The tip about the 4GB iPhone and rumors of Wal-Mart shoppers being trained in activating iPhones was posted on the Boy Genius Report. The site also featured photos of a training manual with the Wal-Mart name and logo on the manual.

No Official Comment

"We have made no official comment on offering the iPhone," said Kelli Cheeseman, a spokesperson for Wal-Mart.

"A $99 iPhone could be an extremely important product as Apple continues the drive to grow market share and Wal-Mart would be the perfect place for that device to land," said Michael Gartenberg, vice president for mobile strategy at Jupitermedia. "It would also set the stage for the phone to begin to fragment into devices, with different features at different price points. Much like what happened with the iPod."

Currently, the company has more than 80 iPhone-related products, including carrying cases, chargers, protective film, and antennas available on its Web site, but the products are not shown to be available at retail stores.

The rumored $99 price tag for the 4GB iPhone is expected to come with a two-year agreement, but that may not be enough even for Wal-Mart shoppers.

"Although leading mobile operators are subsidizing more smartphones to reach lower prices, they tie the device to two-year contracts with monthly data -plan rates, which remain too expensive for the mainstream user," said Roberta Cozza, a Gartner analyst.

Still, Gartenberg said most subsidized phones come with a contract.

"The key is what the service plan for that device might look like," Gartenberg said. "In addition, to many customers, the cost of acquisition of the device short-term is more important than monthly fees."

Slowing Growth

Worldwide sales of smartphones to end users totaled 36.5 million in the third quarter, an 11.5 percent increase from the same period in 2007, according to Gartner. While Nokia took the lead, with RIM's Blackberry in second, Apple took third place.

Apple improved its market share to 12.9 percent in the third quarter and shipments during the third quarter were nearly seven million, according to Gartner. Apple's sales increased more than four times compared to the same period in 2007 because of its geographical reach, availability in more markets, and the decrease in prices.

Still, analysts say sales growth will begin to slow.

"The current economic climate is negatively impacting sales of higher-end devices," said Cozza. "Going forward, we should expect the smartphone device market to continue to grow, but at a slower pace."