With the economy showing little signs of life, big discounts are giving consumers some price relief in areas few thought they'd ever see -- including cuts to $1,000-plus big screen TVs and even $4-a-gallon gasoline. Some of the hottest gadgets are on the sale table these days as well, and rumors have popped up that even the iconic Apple (NASDAQ:AAPL) iPhone will have a discounted model available soon at -- where else? -- Wal-Mart (NYSE:WMT).

Neither Apple nor Wal-Mart is commenting on the rumors of course, but numerous blogs and news sources have been citing inside talk of a $99 iPhone model -- a price point achieved by cutting the memory down to only four gigabytes. There seem to be plenty of Wal-Mart employees confirming that the discount chain will sell the device before year's end, but no one seems able or willing to corroborate the $99 price level.

The best evidence so far of the rollback on the iPhone is a Wal-Mart ad leaked on MacRumors that details a much less impressive $2 discount off the eight-gigabyte model, normally offered for $199 by Apple and AT&T (NYSE:T) with a two-year contract. This would make more sense as it would not significantly undercut fellow independent retailer Best Buy (NYSE:BBY), which offers the iPhone at the $199 price point for an eight-gigabyte model and $299 for the 16-gigabyte.

At this point in the iPhone's life cycle, Apple also has little need to plunder even lower down in the wireless device pool. With its international appeal and availability, I don't believe Apple will have any problem significantly exceeding its target of 10 million devices shipped this year. Sacrificing profitability and high-end appeal for an even greater market share doesn't necessarily give shareholders the best return -- just ask Nokia (NYSE:NOK) shareholders what garnering 40% of the market share, primarily by offering low-cost phones in emerging markets, has done for them.

And Apple has no serious, immediate threats to the iPhone platform either. Neither Research In Motion's (NASDAQ:RIMM) Storm (offered as a joint venture between Verizon Communications (NYSE:VZ) and Vodafone) nor Samsung's Instinct (offered by Sprint Nextel) will significantly undercut or outperform the iPhone, although each may capture a decent-sized piece of the smartphone pie.

If I were an Apple investor, my 2008 holiday wish would be simple: With respect to the low-end phone market, just don't go there.

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