SAN FRANCISCO (MarketWatch) -- Remember all those people who camped out and waited on line at Apple stores to be among the first to snag an iPhone?

Well, that novelty and feeling of smug superiority might soon wear off if the rumors are true that Apple Inc. may sell its sleek smart phone at Wal-Mart Stores Inc.

I was surprised when I heard the buzz. Isn't Wal-Mart WMT, -0.08% , the discount behemoth with more than 2,500 homogeneous box stores in the U.S., the antithesis of everything that the unique, design-focused Apple AAPL, -0.75% brand stands for?

Officials at Apple in Cupertino, Calif. were of no help in confirming the story, but that's to be expected. Apple spokesman Steve Dowling declined to comment. Even so, it does appear that the company, and its service/distribution partner AT&T Inc. T, -0.28% will be selling the iPhone at Wal-Mart, possibly later this month, analysts say.

"Our research indicates that recent market reports of Wal-Mart selling Apple's iPhone 3G appear to be true, though details (timing, price, etc.) remain uncertain," wrote Toni Sacconaghi, a well-regarded analyst at Sanford Bernstein, in a report last week.

As Sacconaghi points out, many key details remain uncertain, including the price. Some have even speculated that the iPhone would be priced at $99 at Wal-Mart, for a lower-end model with a smaller amount of storage -- four gigabytes -- a rumor which was first reported by The Boy Genius blog. But several analysts have since dismissed the $99 price point. See Boy Genius report here.

Still, even at its current price of $199 for the eight-gigabyte iPhone, I wondered if selling the hot smart phone at Wal-Mart would detract from its cachet as the most stylish and sought-after gadget of the year. Would it become another Motorola Inc. MOT Razr, which was initially a trendy, luxury item but lost its status?

"It's probably premature to say whether this will lead to the kind of value erosion that we saw with the Razr," said Ross Rubin, director of industry analysis with the NPD Group, in an interview. "A lot of that came from independent dealers and the Internet. Apple hasn't opened up the floodgates (with its distribution). But the Razr had quite a few years of being positioned as a high-end device before it became a free offering."

Apple is clearly looking to make the iPhone as mainstream as possible, much as it has done with the iPod, which is now the dominant digital music player in the U.S.

The iPod, which has an entry retail price of $49 for an iPod shuffle, now has a 71% stake of the $2.4 billion MP3 market, as of the end of September, according to NPD Group's retail tracking service. The iPod can be found at Wal-Mart.

"Apple's potential partnership with Wal-Mart likely indicates that Apple ultimately wants to drive mass-market adoption of the iPhone (like it has done with the iPod), rather than maintain a high-end positioning (as in the case of the Mac)," Sacconaghi wrote.

Calling a different customer

With the low-priced, high-volume iPod music player, Apple's distinguishing feature is its iTunes music download service, which hooks consumers in with its simplicity when the two are used together. As more cell phone makers are now emulating the iPhone's ease in surfing the Internet, as well as other features like the touch screen in their own smart phones, Apple is banking on applications created just for the iPhone to set the device apart.

Analysts are not yet clear on how much volume Apple would drive initially by selling the iPhone at Wal-Mart. NPD's Rubin points out, however, that buying an iPhone is a much more complex purchase than buying a new iPod, because it entails a signing a subscription agreement with a cell phone service provider. Some budget-conscious Wal-Mart customers might balk at the monthly cost of the service plan for an iPhone, which starts at about $70.

"There are far more considerations that go into the purchase of a cell phone than into the purchase of an MP3 player," Rubin said. Many customers are wedded to their current cell phone providers, either through a family plan or through regional coverage issues. "For Wal-Mart's customer base, it is a stretch for many of those customers to be considering any smart phone." Rubin added that the iPhone's arrival could also bring new shoppers to Wal-Mart.

Sacconaghi expects a "less-than-proportionate impact" on iPhone sales and is not adjusting his iPhone estimates yet. He is currently looking for 21.3 million units sold in fiscal 2009.

"We believe iPhone sales will benefit from the added distribution, though not proportionately," he noted. Wal-Mart is the second-largest consumer electronics retailer in the U.S. after Best Buy Stores BBY, +1.51% . "Wal-Mart will have a greater impact on the iPhone's demographic reach in terms of raising awareness and availability among lower-end consumers who are less likely to shop at the Apple Stores or Best Buy."

So for those waiting for an even lower-priced iPhone, it may not happen this year, even if the iPhone is sold at Wal-Mart. But Shaw Wu of Kaufman Brothers Equity Research believes the $99 price point is inevitable at some point, as Apple "rounds out its cell phone product line."

So yes, some of the exclusiveness of the first iPhones will inevitably be lost in the process as the price falls, but isn't that true with all hot new electronics products, thanks to the constant evolution of ever-shrinking semiconductors and storage at the heart of most consumer electronics devices?