Anatomy of a rumor: Wal-Mart’s $99 iPhone

December 8, 2008, 6:04 PM UTC

The blogs and business wires were buzzing Monday morning with two juicy iPhone rumors: 1) That Wal-Mart would begin selling iPhones three days after Christmas and 2) That a low-end model would sell for $99.

The first, as we reported nearly three weeks ago, is true. (See Wal-Mart’s post-Christmas iPhone sale.)

The second, as near as anyone can tell, is almost certainly not true — although it seems to have taken on a life of its own, most prominently in a report published Sunday evening.

On Monday morning, MacRumors reported that, based on leaked Wal-Mart training and advertising material, the $99 iPhone rumor was “unlikely.” MacBlogz went further: “Based on every piece of information we’ve heard, and direct information inside AT&T, this is not happening.”

So how did the story get rolling?

It started with the Boy Genius Report. a blog with back-channel contacts at AT&T  (T) that have often proved reliable. In fact, the news that Wal-Mart (WMT) would be selling Apple’s (AAPL) iPhone originated with Boy Genius, although the date that sales would begin was fuzzy until a Boy Genius reporter got his hands on an AT&T memo spelling out the timeline for in-store training  and national rollout. (link)

The $99 iPhone rumor, although originating from the same site, had a very different feel to it. The Boy Genius report posted on Dec. 4, started like this:

“We just got a tip that in addition to the iPhone 3G actually making its way to Walmart, as we exclusively told you, there will be a 4GB model priced at $99 with a 2-year agreement. We’re not putting our stamp of approval behind this one just yet as the tipster isn’t listed in our BGR’s Guide to respected Ninjas handbook, but it does make you think, doesn’t it?” (link)

The $99 rumor got conflated with the Wal-Mart story in subsequent reports — after all, they both came from the same blog, right? — and received what was taken by some as confirmation when Shaw Wu, an analyst who follows Apple for Kaufman Bros., addressed it in a report to clients:

“While we are not sure of exact timing, we think a $99 Apple-branded cell phone is inevitable.” (link)

Wu’s remarks were picked up by Bloomberg’s Connie Guglielmo, and by Monday they had made their way to the top of the online news food chain at

In fact, the iPhones at Wal-Mart will be sold at a discount, as VentureBeat reports and the ads leaked on MacRumor confirm: for $197  —  $2 off the $199 list price.

The Boy Genius, for his part, hasn’t backed off his initial report, but neither is he fully endorsing it. “Waiting for some feedback from a couple sources,” he wrote in reply to an e-mail inquiry. “At this point I just don’t know.”

Neither Apple nor Wal-Mart would comment on the rumors.

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