By Alistair Barr

SAN FRANCISCO, Dec 14 (Reuters) - Wal-Mart Stores Inc said on Friday that it began selling Apple Inc's flagship iPhone 5 smartphone at a big discount in thousands of its stores.

Wal-Mart said it is selling the 16 GB Apple iPhone 5 for $127, versus an original price of $189.97. The price is valid with a two-year contract from wireless carriers Verizon, Sprint and AT&T, the retailer added.

Wal-Mart said it is also selling the 16 GB iPhone 4S and the 16 GB iPad with Retina display and WiFi at discounts.

The offers will be available for 30 days in about 3,000 of Wal-Mart's stores, which were not identified. They are not available online, according to the retailer.

Apple has focused on high-priced, premium gadgets for many years and has strictly enforced its prices with retailers and other distributors. However, a Wal-Mart spokeswoman said on Friday that the discounts were arranged with Apple.

"We worked together with them on this," the spokeswoman, Sarah Spencer, said. "They are a great partner."

Wal-Mart is pricing the iPad starting at $399, down from $499. Beginning Dec. 17 the retailer said it will throw in a $30 iTunes card.

Wal-Mart is selling the 16 GB iPhone 4S for $47, versus an original price of $89.97, it said.

Apple did not respond to a request for comment.

Wal-Mart's cooperation with Apple is a contrast to its relationship with Inc < AMZN.O>, the world's largest Internet retailer.

In September, Wal-Mart said it would stop selling Amazon's Kindle eReaders and tablets, placing a bet that consumers would be more interested in Apple's gadgets. This spring, Target Corp <TG T.N> st opped selling Kindle devices.

Earlier on HuffPost:

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  • Engadget

    <a href="" target="_hplink">Reviewer Tim Stevens</a> found the overall look of the iPhone 5 to live up to expectation, and he commended the "clear evolution" from the industrial design seen in the iPhone 4. But one of the biggest differences, he claims, is not something you see: <blockquote>At 112 grams [the iPhone 5 is] 20 percent lighter than the 4S, a figure that doesn't seem like it would make much of an impact. It does -- so much so that it's the lightness, not the bigger display or the thinness, that nearly everybody praises when first getting a chance to hold the iPhone 5 in their own hands.</blockquote> Stevens found the need for more accessories (because of the Lighting port) disappointing, but his main qualm with the port update is the apparent lack of increased speed when transferring data manually to a computer. "For now, at least, the new connector remains confusingly at odds with Apple's own next-generation and similarly named data interconnect," he said.

  • The New York Times

    <a href="" target="_hplink">David Pogue of the New York Times</a> wrote that the larger design of the latest iPhone is "nice but not life-changing." Still, he did find the upgraded camera impressive. <a href="" target="_hplink">From Pogue's review</a>: <blockquote>The camera is among the best ever put into a phone. Its lowlight shots blow away the same efforts from an iPhone 4S. Its shot-to-shot times have been improved by 40 percent. And you can take stills even while recording video (1080p hi-def, of course).</blockquote> Nevertheless, Pogue wasn't exactly keen on the device's <a href="" target="_hplink">Lighting connector</a>. He liked that the new jack "clicks satisfyingly into place," but worried that because it doesn't fit into any old Apple accessories, customers could wind up spending several hundred dollars on adapters.

  • CNET

    For the most part, <a href="" target="_hplink">the editors at CNET</a> found the new iPhone 5 to live up to all the Apple fanboy hype: <blockquote>The iPhone 5 completely rebuilds the iPhone on a framework of new features and design, addressing its major previous shortcomings. It's absolutely the best iPhone to date, and it easily secures its place in the top tier of the smartphone universe.</blockquote> But while they enjoyed the faster iPhone, complete with LTE connectivity, <a href="" target="_hplink">the reviewers suggest</a> a possible downside to using the new, speedy capabilities. "[W]ith fast LTE comes expensive rates and data caps," they wrote. "AT&T also requires a specific plan to even enable FaceTime over cellular."

  • AllThingsD

    <a href="" target="_hplink">Walt Mossberg</a> found the iPhone 5 to be a speedy step up from its predecessor. "Perhaps the single biggest functional improvement in this iPhone--something you can't get by upgrading the software on an older model--is speed," wrote Mossberg in his review, published on Wall Street Journal-owned blog AllThingsD. "Apple has finally connected the iPhone to the fastest cellular data network, called LTE, and data downloads and uploads just fly, even when you aren't on Wi-Fi." But Mossberg was unimpressed with <a href="" target="_hplink">Apple Maps</a>, which have replaced the built-in Google Maps feature from previous iPhones. Prospective buyers using public transportation, take note: <blockquote>[W]hile Apple's maps feature a 3-D "Flyover" view of some central cities, they lack Google's very useful ground-level photographic street views. And they also lack public-transit routing. Apple will instead link you to third-party transit apps.</blockquote>

  • TechCrunch

    <a href="" target="_hplink">MG Siegler</a> practically drooled over the iPhone 5 in his review, but he promises all the gushing is for a good reason. The device, he claims, is faster, lighter, thinner -- simply, better. "I really do believe this is the best iPhone upgrade that Apple has done yet (besting the iPhone-to-iPhone 3G jump and the iPhone 3GS-to-iPhone 4 jump)," he gushed. "As such, it's the best version of the iPhone yet. By far." <a href="" target="_hplink">Siegler did admit</a> the larger screen means your fingers and thumbs will need to do some adjusting when typing horizontally, or tapping specific buttons.

  • USA Today

    <a href="" target="_hplink">USA Today's Edward Baig</a> thinks the iPhone 5 is a "winner" and certainly one of the top smartphones on the market. But he suggests that not every user will be satisfied, particularly when it comes to the device's 4-inch display. He cautions readers thus: <blockquote>[C]hoosing iPhone 5 vs. a top-of-the line Android alternative isn't a cut-and-dried decision, especially if you're partial to a jumbo display, such as the one on the big, bold and beautiful Samsung Galaxy S III, an Android rival for which I've had high praise.</blockquote> The half-inch upgrade in screen size (vs. previous iPhones) does hit some high notes with Baig, though. "The new screen, 4-inches diagonally, exploits the stunning Retina display technology that first showed up on the iPhone 4," he said.

  • T3

    The iPhone 5 had <a href="" target="_hplink">reviewers at T3</a> raving about 4G capability, an enlarged screen and camera updates. But the new operating system, iOS 6, still has them questioning some of the differences between the latest iDevice and its predecessors. "The iPhone 5 comes with iOS 6 as standard. But, at this point it's difficult to see where the unique differences are between it running on an iPhone 4S and iPhone 5," <a href="" target="_hplink">T3's review reads</a>. Still, the <a href="" target="_hplink">T3 team</a> did enjoy a few (much needed) new features, including the iPhone 5's updated headphones. "One very welcome improvement are the new EarPods, which come as standard... [I]t's great to have a better audio experience straight out of the box." Overall, these reviewers found this product to be the best iPhone available today, but maybe not the best phone around. "[A] lot has changed in a year, and the current crop of Android superphones - and the incoming Windows Phone 8 handsets - have closed the gap," they wrote. "For nearly every 'new' feature announced at the Keynote, there was a Samsung, Android, Windows, Nokia, Sony or HTC fan saying 'my phone already does that.'"