Dec. 18 (Bloomberg) -- Wal-Mart Stores Inc. will begin selling Apple Inc.’s iPhone by the end of the year, putting the device in front of millions of budget-conscious customers, according to store representatives.

While Wal-Mart has refused to comment on whether it plans to sell the iPhone, store clerks in Arizona, California, Nevada, Texas and Washington contacted by Bloomberg News said the device will go on sale Dec. 28.

Apple Chief Executive Officer Steve Jobs has spent the past six months expanding distribution of the iPhone, which accounted for more than a third of Apple’s revenue last quarter. The device is now available in more than 75 markets, up from six countries earlier this year. Best Buy Co., the largest U.S. electronics retailer, already sells the iPhone.

Apple offers two models of the Web-surfing phone, for $199 and $299. Wal-Mart, based in Bentonville, Arkansas, is expected to sell them for $197 and $297, with a two-year service contract, technology site Engadget.com said yesterday, citing what was described as a memo from Wal-Mart to employees. The store clerks contacted by Bloomberg didn’t know the price.

Wal-Mart has made no official announcement on offering the iPhone and declines to comment, spokeswoman Kelly Cheeseman said yesterday. Steve Dowling, an Apple spokesman, didn’t return a message seeking comment.

Apple, based in Cupertino, California, rose 27 cents to $89.43 on the Nasdaq Stock Market by 4 p.m. New York time. The shares have lost 55 percent this year. Wal-Mart, up 17 percent this year, gained 22 cents to $55.41 in New York Stock Exchange composite trading.

Two Models

In addition to Best Buy and Apple’s own stores, the iPhone is available from AT&T Inc., the exclusive U.S. provider of wireless service for the device.

The companies currently sell 8-gigabyte and 16-gigabyte models of the iPhone, which combines a handset with Apple’s iPod digital media player. Apple stopped selling a 4-gigabyte model in September 2007, after Jobs said customers preferred versions with more storage.

Representatives at Wal-Mart stores in Phoenix; Marysville, California; North Las Vegas, Nevada; Plano, Texas; and Renton, Washington, said the iPhone would be available Dec. 28.

Maynard Um, an analyst at UBS AG in New York, countered speculation earlier this month that Apple would sell an iPhone for $99 at Wal-Mart. A $149 price for a stripped-down model may make sense, he said in a Dec. 8 report.

Wal-Mart, which also runs the Sam’s Club chain of warehouse stores, posted a sales increase of 3.4 percent last month, topping its forecasts. More than 200 million people in the U.S. shop at Wal-Mart each year, the company says on its Web site, citing data from Nielsen.

Faster Model

The iPhone became the most popular mobile phone among U.S. consumers last quarter, Port Washington, New York-based research firm NPD Group said last month. NPD’s numbers exclude purchases by companies.

Apple, which introduced the first iPhone in June 2007, released an updated version in July that runs on a faster network.

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Joseph Galante in San Francisco at jgalante3@bloomberg.net

Last Updated: December 18, 2008 16:12 EST