Apple Broadens Channel for iPhone Sales

Vendor finally widens distribution beyond just Apple and ATT retail stores to encompass national retailer Best Buy. Customers are still required to sign a two-year contract with service provider AT&T.

Apple has broadened the distribution channel for its popular iPhone by signing consumer electronics retailer Best Buy to sell the new 3G phone at nearly 1,000 locations starting Sept. 7.

The move could help Apple reach its goal of selling 10 million iPhones by the end of this year and marks a significant expansion of Apple's channel strategy for the device. So far, the phone only has been sold in the United States directly from Apple retail stores and at AT&T retail outlets.

It is expected that about 600 Best Buy stores will showcase the handset, priced at $199 to $299 depending on amount of storage, at its Apple mini-shops. It will also be available at standalone Best Buy Mobile shops, located in some 15 U.S. cities. Best Buy customers still will be required to activate service with carrier AT&T and sign a two-year service contract.

AT&T has said that the current waiting period is about seven to 10 days for customers who come in its stores to buy an iPhone in advance. It expects to be able to handle same-day sales within a few weeks time.

Best Buy officials told Reuters News Service that the company is counting on the introduction of the phone to help drive customer traffic and  stimulate additional purchases during the crucial holiday shopping season, which accounts for roughly one-third of the retailer's full-year sales.

"It solidifies us as the place to go for the cool stuff," Best Buy Mobile President Shawn Score said in an interview with Reuters. "Our customers are looking for this product."

The addition of the iPhone is a coup for Best Buy, which has picked up market share in mobile phones, computing and flat-panel televisions as main rival Circuit City Stores  explores strategic options and struggles to turn around its business.

"We do believe that broadening our assortment and having iPhone in our stores is certainly going to be very important" heading into the holiday season, Score added.

Best Buy, which completed the rollout of mobile shops to its U.S. stores last week, is expanding its product line in mainstay electronics categories as well as branching out into nontraditional areas such as musical instruments. Its mobile shops are a joint venture with Britain's Carphone Warehouse Group.

The company said this week it would test automated kiosks at major U.S. airports to sell such items as mobile phone accessories and digital cameras to travelers.

(This article was adapted from and Reuters news service.)

TAGS: Microsoft,consumer,iPhone,Apple

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