Wal-Mart on Sunday began start selling Apple's wildly popular iPhone at nearly 2,500 of its stores, but not at the $99 price that was previously expected.

The retailer said it would offer Apple's black 8-GB iPhone 3G model, which also holds about 2,000 songs, for $197. The 16-GB model, which comes in black or white, will be priced at $297. Apple sells its handsets for $199 and $299 for its 8 GB and 16 GB models, respectively.

Consumers would still need to purchase a two-year service agreement from AT&T, Apple's U.S. provider. New plans start at $70 per month.

Earlier this month, The Associated Press and Bloomberg news quoted unnamed Wal-Mart employees who said the popular smartphones were expected at heavily discounted prices before the end of the year. However, there was no confirmation that Wal-Mart would offer a $99, 4-GB iPhone.

Still, Wal-Mart has the potential of providing a major boost to iPhone sales. Apple sold 6.89 million iPhones during its last reported financial quarter, which ended on Sept. 27. Apple's iPhone market share for the first quarter was 19.2%, a drop from 26.7% the quarter before. Only Research In Motion's BlackBerry series controls a larger share of the smartphone market.

Despite Wal-Mart's reputation for pushing prices lower than its competition, consumer can find Apple's iPhone smartphone for much less elsewhere. Best Buy currently sells the 8-GB iPhone for $190 and the 16-GB version for $290 until Dec. 31. That's $10 less than the usual price found at Apple stores.

The lowest price award, however, goes to AT&T, which is selling refurbished iPhone 3Gs in the black 8-GB version for $99 with a two-year service contract through the end of the year. Previously, AT&T discounted its refurbished iPhones to $149. The wireless telecom is also offering refurbished 16-GB iPhone handsets for $199 during the same time period.