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Because of its enormous volume of sales, Walmart is in the best position to slash its profit margin on the iPhone 5.
"Walmart has a history of discounting things, even iThings, though this is the steepest discount I've seen," said Avi Greengart, an analyst with Current Analysis. "That makes it a good deal for consumers, but it likely has almost no bearing on Apple's margins.
"Apple isn't selling iPhones to Walmart at a steep discount -- the iPhone is heavily subsidized by carriers, and it isn't clear if Apple is selling the iPhone to Walmart with any discount at all."
Walmart isn't alone in its iPhone sale. RadioShack ran a $20 discount promotion for a limited time ending Dec. 15, and Best Buy, as it struggles to keep up with online competition, is offering $50 off.
Greengart told us this is a sign that the iPhone is such a draw that carriers are willing to heavily subsidize it and then retailers are willing to sacrifice their margins to sell it, "either because a) they have a low margin, high volume business model, b) they want to use the iPhone's popularity to get customers into their stores, or c) all of the above."