Wal-Mart Stores Inc. announced on Friday that Apple's iPhone will be available in its stores starting December 28. Nevertheless the popular cell phones will not priced as low as some anticipated. Wal-Mart plans to sell the black 8-gigabyte iPhone 3G model, which holds about 2,000 songs, for $197. The 16-gigabyte model, in black or white, will be priced at $297.

All of the phones require a new two-year service agreement from AT&T Inc or a qualified upgrade, Wal-Mart said. The press release quotes Gary Severson, senior vice president of Entertainment at Wal-Mart, as saying, “We are delighted to bring customers this ground-breaking mobile technology. 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.”

Reports that Wal-Mart would begin selling the phones, previously available only at Apple stores, Best Buy Co. Inc. and AT&T Inc., have been circulating for weeks, but the retailer hadn't commented. Many of those reports indicated the phones might be priced as low as $99, but Wal-Mart made no mention of such discounts on Friday, when it made the actual announcement.

According to the press release, the company’s price match policy will allow stores to “match the price of any local competitor’s advertised store price on the same item within the same promotional period.” Best Buy is offering the iPhone for $190 for the 8GB and $290 for the 16GB models. Wal-Mart shares recently gained 14 cents to $55.44 in premarket trading. Best Buy shares fell to $26.14, while AT&T shares haven't traded.