Wal Mart Stores Inc stated it will begin offering the Apple  iPhone starting on Sunday, but the best selling mobile phones won’t be priced as low as some projected. Wal-Mart plans to offer the black 8-gigabyte iPhone 3G model, which can hold about 2,000 songs, for $197. The 16-gigabyte model, in black or white, will cost $297. All of the phones require a new two-year contract from AT&T or a qualified upgrade.

The move provides Apple the opportunity of reaching millions of Wal-Mart shoppers who may not be as acquainted with the company’s products. Wal-Mart known for its appeal to a lower-income group of consumers than those who normally buy Apple’s Macintosh computers, iPods and iPhones, which are usually more expensive that other music players and PCs. However the world’s largest retailer has also attracted new customers seeking low prices during a recession.

Various sites had previously suggested that Apple would offer a 4-gigabyte model of the iPhone for $99 at Wal-Mart stores. However, the phones being sold at Wal-Mart are identical to the ones already on the market, for about $2 less than the prices offered at other locations.

Wal-Mart is one of few U.S. retailers whose sales remained high in the weeks after the American Thanksgiving holiday and it is trying to have shoppers return to its stores following Christmas. The company ran a commercial on Friday morning showing a mother taking her son to Wal-Mart to spend the holiday gift card. Although the commercial did not refer to iPhones, it did show them heading towards the electronics section of a Wal-Mart store. The phones will be available in nearly 2,500 stores starting December 28.