Target (NYSE:TGT) became the first retailer to match Wal-Mart’s (NYSE:WMT) unusually low price for Apple’s (NASDAQ:AAPL) upcoming iPhone 5C when it announced that it will also be selling the 16GB iPhone 5C for $79 if customers sign up for a standard two-year service contract. However, Target customers may also get an additional 5 percent off if they opt to use their Target REDcard.
Many industry watchers were surprised when Wal-Mart announced it was selling the 16GB iPhone 5C for $79 last week, since Apple typically provides retailers with strong incentives to keep its devices above the suggested retail price, according to a report from the San Francisco Chronicle. These incentives include financial marketing support and some fairly narrow profit margins on Apple’s devices.
In fact, some commentators have speculated that retailers such as Target and Wal-Mart may be selling the iPhone at a loss in order to attract customers to their stores. However, it is also possible that both retailers cut special pricing deals with Apple.