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article imageBest Buy Inks Deal With Apple to Become First Retailer to Sell iPhone 3G in U.S.

By Chris Hogg     Aug 13, 2008 in Technology
Best Buy will sell Apple's iPhone 3G in the U.S. beginning Sept. 7, the company announced today. As it stands right now, Canada will not be getting the popular smartphone. The U.S. deal makes Best Buy the first national retailer to sell the device.
Digital Journal -- Americans hungry for an iPhone 3G won't have to head out to an AT&T store to pick up the smartphone starting in September, as Best Buy announced it will be carrying the gadget next month.
(To see our in-depth video review of the best and worst features of the iPhone, click here)
Shifting from exclusivity at AT&T to a retail partnership with Best Buy signals a big change in Apple's sales strategy, as this is the first time Apple has sold the iPhone through retail. The partnership is expected to boost sales of the device and help Apple reach its goal of selling 10 million iPhones by the end of 2008.
Best Buy is the leading electronics retailer in the U.S., and the company is no fool; it is proudly promoting the fact it will sell the iPhone 3G on a massive banner ad on its website's front page. A subsection of the site also promotes Best Buy's coup d'retail etat.
In a press release posted on its site, Best Buy says the device will be available through its mobile stores (currently in 15 American cities) and Apple minishops.
“The iPhone has changed the way people think about their mobile phones, and we are delighted to help more customers get their hands on this revolutionary product,” said Brian J. Dunn, president and chief operating officer, Best Buy. “Our Best Buy Mobile employees have the training and expertise to deliver the best experience possible for our customers - from the initial purchase through the life of their iPhones.”
According to the New York Times, a retail analyst with Sanford C. Bernstein & Co., said Best Buy may bring in "...no profit on the phone itself, and even if it does, its markup will amount to $50 or less."
So why would Best Buy be excited by the deal? Because the semi-exclusive deal brings hordes of people through the front doors, giving the retail giant a chance to sell other electronics. Also, Best Buy sells many iPhone 3G accessories. The analyst that spoke to the Times estimates Best Buy "...will be able to sell $50 to $100 in very high-margin accessories with each phone."
In total, about 600 stores will stock the handset at $199 and $299, and customers will need to purchase a two-year contract from AT&T to operate the phone.
In Canada, iPhone fans must still purchase handsets from Rogers stores. A spokesperson for Best Buy Canada told DigitalJournal.com this was a U.S. announcement only.
"We don't have anything further to say right now," the spokesperson said.
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