NEW YORK - US RETAIL giant Wal-Mart will start selling Apple's iPhone 3G on Sunday in stores across the United States, the company said on Friday, but not at the big discount which many had been anticipating.

Wal-Mart said a black eight-gigabyte iPhone 3G with a two-year service plan from AT&T will cost US$197 (S$285) - just US$2 off the usual price.

The black or white 16-gigabyte model will cost US$297 with a two-year AT&T service agreement.

The popular phone will be available at nearly 2,500 stores beginning on Sunday, the Bentonville, Arkansas-based company said in a statement.

'We are delighted to bring customers this ground-breaking mobile technology,' said Mr Gary Severson, Wal-Mart's senior vice-president, entertainment.

'Our electronics associates have been preparing for many weeks for the arrival of iPhone 3G,' he said.

Until now, the iPhone has only been available through Apple's own stores, AT&T outlets and electronics chain Best Buy.

The Internet has been buzzing for weeks about an appearance by the iPhone in Wal-Mart stores but many had been expecting the company to offer a four-gigabyte model at a cut-rate price, even as low as US$99.

Sales of the iPhone 3G have rocketed since the touch-screen motion-sensing devices geared for high-speed wireless Internet networks hit the market in July.

According to market research firm Gartner, Apple now has 12.9 per cent of the smartphone market, trailing Research in Motion's Blackberry (15.9 per cent) and Nokia (42.4 per cent). -- AFP