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Friday, December 26, 2008, 07:00 am PT (10:00 am ET)

Wal-Mart announces iPhone availability beginning Sunday

Wal-Mart on Friday formally announced plans to begin carrying the iPhone later this week but will not be selling the device at rock bottom prices as once rumored.

In total, nearly 2,500 Wal-mart stores will carry the Apple handset, selling the 8GB model for $197 and the 16GB model for $297 with a new two-year service agreement from AT&T or qualified upgrade.

Wal-mart also announced that its price match policy allows stores to match the price of any local competitor's advertised store price on the iPhone should one of its rivals announce lower pricing.

"We are delighted to bring customers this ground-breaking mobile technology," said Gary Severson, senior vice president, Entertainment, Walmart. "Our electronics associates have been preparing for many weeks for the arrival of iPhone 3G. We are excited to now help new customers learn more about the features and services that make the iPhone unique."

Once inside a Wal-Mart store, customers can find more information and assistance at the Apple iPhone 3G kiosks located at the Walmart Connection Center in the Home Entertainment department.

Word that Wal-Mart would join Best Buy as the only other third-party US retailer to offer the iPhone first surfaced in October.