As the U.S. smartphone market has become increasingly saturated, retailers have intensified the battle for your consumer dollars. The release of Apple's (AAPL) latest generation of iPhone - in both the iPhone 5S and the iPhone 5C - has sparked a further escalation, particularly between Wal-Mart (WMT) and Best Buy (BBY). In response to Wal-Mart's listed price for the iPhone 5C of $79, Best Buy began a promotion to offer customers who traded in a working smartphone a $50 gift card, effectively making the iPhone 5C $50. Wal-Mart answered by dropping its price to $45. This week, Best Buy is offering $100 for a trade in, thus making the iPhone 5C free with a contract or the iPhone 5S $99.
BBY data by YCharts
In the video below, I discuss the how these two retailers have traded blows in the smartphone arena as well as some of the implications of the Best Buy program. Not only does this competition give some insight into Apple and Google (GOOG) Android sales, it may show us whether Best Buy will be able to stay competitive in this critical market.