Except it won't, really. Because Apple CEO Steve Jobs, unlike Franzen, occasionally acts like a grownup — and always acts like a businessman.

Walmart is planning to start selling two iPhone models around Christmas, according to store employees interviewed by Bloomberg. This is surely the end of the iPhone's upscale brand image, argues scary-smart economist Stephen Dubner in his Freakonomics blog.

There are two problems with that. One, Dubner bases his argument on the rumor that Walmart will sell iPhones for $99, less than half the cheapest price they go for today. Yes, dumping the iPhone at a cheap price will piss off customers who spent a hundred dollars extra at an Apple Store.

But it's not going to happen. Apple is notoriously controlling about prices. And there's no way Jobs is going to put his pricey retail palaces at a disadvantage. Sure, Wal-Mart demands discounts when it can play one supplier against another. But Apple, not Wal-Mart has the advantage here. In the past, when Wal-Mart started selling iPods, it didn't get any special discounts. Bloomberg asked a Walmart employee how much the iPhones would cost. The answer: $199 to $299, just like they do today.

Lots of analysts believe that Apple will eventually sell iPhones for $99. Hardware gets cheaper over time, and AT&T actually pays most of the bill, hoping to make up the subsidy with wireless subscriptions. So sure, Apple might drop the price — but it will drop the price everywhere at once rather than cut Wal-Mart a special deal.

But the Walmart-will-ruin-everything line is a great theory, and one that plays especially well in places like San Francisco and Manhattan, which have many Apple Stores but no Walmarts, and dislike Oprah as much as they love their iPhones. Points to Dubner for combining so many cultural touchstones in a single post. Wish we'd thought of it first!

(Photos via nayrb7 and ILoveMyPiccolo via Freakonomics)

• SlotMusic cards will be SanDisk MicroSD cards preloaded with music, album art and other extras.
• Each card will be packaged with a USB sleeve, making plug-in to any computer theoretically no problem.
• The details in the announcement seem intentionally vague on whether the disk will be a one-on-one alternative to CD albums, or whether record labels will create bundles that take advantage of the cards' 1 GB capacity.
• MP3 will be the audio format, with rates as high as 320 kbps rather than the grainier 128 kbps most commonly used to share MP3s. (The 128 kbps rate was chosen as the target for MP3 audio quality back in the early '90s, when ISDN lines were the future.)
• No DRM! Seriously, none.
• The Big Four music labels — EMI, Sony, Universal and Warner — have signed up.
• So far, no details on the initial catalogue of music. "Check back soon for announcements" says the artists page at SlotMusic.org.
• It's gotta be annoying to the record execs involved that Slotmusic.com is owned by a defunct band called S.L.O.T.

We've got a call into Walmart, but our guess is that through ad network LinkShare's affiliate marking program, hundreds if not thousands of Web site publishers put Walmart banner ads on their sites in hopes of referring shoppers and earning a slice of revenue from whatever they buy on Walmart.om. It would be very difficult to thoroughly vet each publisher. But if there's ever been a need for a clear example as to why Madison Avenue interactive agencies do not trust their clients to ad networks that claim extensive reach above all else, there is no more. Update: A Wal-Mart flack has gotten back to say: "We are investigating this matter and take it very seriously. This site used our banners without our authorization and we are working to have them immediately removed."

"The meeting leader said, 'I am not telling you how to vote, but if the Democrats win, this bill will pass and you won't have a vote on whether you want a union,'" said a Wal-Mart customer-service supervisor from Missouri. "I am not a stupid person. They were telling me how to vote," she said.

(Photo by AP/Charles Rex Arbogast)

More precisely, Wal-Mart family money. Madrone Capital Partners, which manages venture-capital investments for the heirs of Wal-Mart founder Sam Walton, led Cuil's most recent $25 million financing round in April. Madrone's Greg Penner, who married Carrie Walton, Sam Walton's granddaughter, is on Cuil's board. And on Wal-Mart's.

Penner, who lives in Atherton, has ensconced himself in Silicon Valley society, despite an atypical background for the liberal Bay Area: His parents are evangelical sex therapists who believe in counseling gays into heterosexuality. He is a protege of Stanford Business School's Jack McDonald, and served as an executive at Walmart.com, a short-lived dotcom spinoff of Wal-Mart backed by Accel Partners and later folded back into the retailing giant.

Most significantly, he's also a board member of Baidu, a Chinese search engine which is eating Google's lunch in that country. The Waltons' investment in Cuil could be written off as simply an attempt to make money. But with Penner involved in two prominent Google's rivals, it's hard not to wonder if the Bentonville gang isn't hoping to do more than just add to its pile.

The Internet, thankfully, remained untouched by this shopping apocalypse. Online advertising behemoths Google and Microsoft say they haven't felt an oncoming recession at all. And even if there was one coming, Google cofounder Sergey Brin told analysts last week that Google would actually thrive in such a consumer belt-tightening environment. In hard times, consumers look for the best deals, and Google search provides them. Who does he expect to buy ads for "beans and rice" searches? Brin did not elaborate.

Going by Brin's theory, Wal-Mart should have done gangbusters. But no. The penny-pincher's paradise actually fared worse than most, growing 0.2 percent year over year.

(Photo by Cryostasis)

Day 1
Granted security ID, all-parks badge
Orientation led by bitter-seeming guy who did the headlights in Cars

Day 2
Interview applicants for Imagineering Department
Already sick of piped-in music by Hannah Montana

Day 3
Awkward sensitivity training from Princess Ariel reveals that Microsoft isn't the only company with post-op managers

Day 5
In bathroom, accidentally spray water on the guy left in charge of Go.com; walk hurriedly away while foreboding soundtrack by Alan Menken swells in background
Banned from Club Penguin fifty times in one hour, setting new office record commemorated on conference room whiteboard

Day 7
IT finally sets up intranet access; waste all day on MickeyWiki reading gay agenda
Get stuck adopting two Dalmatians left over from straight-to-DVD re-remake

Day 10
Discover you're not supposed to repeat outfits on "Furry Fridays"

Day 14
Tearful call from Mom, who says the whole church in Biloxi is praying for you

Day 15
As ordered in company handbook, hide subliminal sex messages in product

Day 22
Boss fired for taking nude photos with High School Musical 4 star

Day 30
Take Steve Jobs on department tour; he constantly snickers and says "I'm totally blogging this"

Day 41
Visiting niece draws picture of Donald Duck, is ushered out by security for trademark violation

Day 50
Convince copywriters to forgo residuals because "we can't make any money on this Internet thing"

Day 65
Nerve-wracking product demo for frozen head of Walt Disney

Day 94
Google buys Disney; vest early, work on new startup built to flip to Wal-Mart

The rise and fall of the PlayStation 3 on eBay is one of the most talked about gaming stories of the year. In order to paint a broader picture, I've tracked pricing trends from preorders to Christmas Eve and surveyed retailers to determine just how hard the PS3 grey market has crashed.

In the days leading up to the PlayStation 3 launch in mid-November, people all over the country lined up with dollar signs in their eyes, hoping to cash in on what was sure to be the most sought after gift this holiday season. I talked to many people planning on financing college, cars, vacations, and countless other dream items with the fruits of their labor. A week later those hopes and dreams were crushed, as reports of plummeting eBay prices poured in. Just how fast did the PS3 grey market crash? Take a look for yourself, and feel free to click the graph for a larger version.

Within two days of the system's launch the going price dropped by over $1000. eBay prospectors across the country were stunned at the rapid depreciation of their investment. While they were still looking at $600 profit on average, it was a far cry from the windfall everyone had been expecting.

The smart thing to do in that situation would be to wait, right? Several enterprising folks I talked to during the launch festivities predicted a glut early on, and planned on holding their systems until Christmas, when demand would be at its highest. As the graph indicates, that wasn't the wisest move. Four days before Christmas PS3 auctions hit the lowest point ever, bottoming out at just $724. Figuring in sales tax, that's less than $100 profit on a 60GB system.

Clearly the way to go for the PS3 prospector was preorders. On November 16th, as the reality of the system shortages began to sink in, buyers spent an average of $2,367 to secure themselves on of the 600 or so preorders sold that day, and from the point eBay started allowing receipt-verified presales prices maintained a steady average of around $1500.

How are retail stores being affected?

With the prices dropping so low, many eBay hopefuls have been returning their purchases to the stores they procured them from. Between packing, shipping, and taxes, it's much less of a hassle just to get a refund and forget the whole thing ever happened. I decided to survey several popular retail 'superstores' to get a feel for just how big a trend grey market returns were.

Here's how this worked. I called a random selection of stores across the country from each of the four retailers listed below. I asked to speak to their electronics department first, and then called back to speak with customer service. I made sure to specify intact, boxed returns to avoid clouding data with random defective units. Interestingly enough, not one store I spoke to mentioned any defective returns. If anything the PS3 is a solid machine. Bear in mind that these are not hard numbers. I spoke to whoever was staffing the departments at the time I called, and only counted the answers applying directly to those people. While I'd like to say you could safely double the returned system numbers below, there are far too many factors involved to make it an accurate estimate.

I picked the four below for various reasons. Fry's because of its unique bundling policy, Best Buy because of its huge initial allotments, Target as a major retailer that isn't focused on electronics, and Wal-Mart because I am apparently a glutton for punishment. All four stores had people wait in line for the consoles...one of the reasons you don't see GameStop represented, another reason being that many GameStop systems went to either employees or regulars to the store tipped off by employees. "But GameStop wasn't allowed to sell to employees!" Where do you think I got mine?

Store Findings:

Fry's Electronics
Number Called: 10 - Called double what I had planned for Fry's because the first five all reported having systems in stock.
Average Returns: two per store
Systems Available? Yes

Fry's stands out from the other retailers I've surveyed in that they still insist on selling their PS3 systems in ridiculous bundle packs with eight or so games. Every single store I called reported having plenty of bundles available for purchase. On average each store had received two returns, with the Alpharetta Georgia location, a favorite of mine, reporting four. Systems at Fry's can only be returned with the full bundle intact, and are resold the same way.

Conclusion: Nothing too surprising here. When I was working at GameStop on Christmas Eve I had countless customers tell me that Fry's had PlayStation 3s just sitting there, with no one buying. The only thing harder than trying to turn a profit off of a PS3 on eBay is trying to turn a profit off an $1100 bundle filled with games no one wants to play.

Target
Number Called: five - they're a major retailer, but they weren't exactly a big launch location.
Average Returns: two
Systems Available? No, though two out of five stores did tell me I had "just missed one."
Conclusion: Target doesn't get many systems in, and when they do they generally last a day tops. One electronics rep I spoke to in Colorado told me they had gotten two returns earlier in the week, which didn't last more that 24 hours on the shelf. Low volume, relatively quick turnaround.

Best Buy
Number Called: 15 - Best Buy had the greatest launch allocations, so I gave them a bit more attention while conducting the survey.
Average Returns: Four - One customer service rep said she had seen as many as eight returned, though she worked at a midnight launch store with a much larger console allocation than the rest.
Systems Available? Not a one, at any store. Most likely a corporate sponsored lie, however, as we've been getting several reports on Best Buy holding systems until New Year's Eve.
Conclusion: A much larger allocation equals a slightly higher number of returns. This whole sitting on items for big holiday sales severely screws up survey data. As well as forcing their employees to lie, they also forced me to lie. When I mentioned I was writing a story, I was told they couldn't comment to the press. I had to tell them I was a father looking in to buying one for his son, trying to figure out if the system was reliable. If anyone asks, my son's name is Rufus, and he has a glandular disorder.

Wal-Mart
Number called: Five before I gave up out of sheer frustration
Average Returns: Inconclusive. While I did have one store tell me they'd seen a couple come back, most of them couldn't figure out how to transfer me to customer service.
Systems Available? Possibly. They might not even know what it is.
Conclusion: While I've known some very helpful and intelligent Wal-Mart employees in my time, all of them must have been off over the past two days. I got through to one customer service rep and one electronics department out of five stores, the rest of the time spent either waiting endlessly on hold or being accidentally hung up on.

While return numbers seem to be relatively low, when you figure in the transactions the employees I spoke to weren't privy to, and then multiply the number by even a fraction of the stores these retailers have scattered across the country, and things start adding up. In an ironic twist to the whole story, it seems as though your best bet for securing a PlayStation 3 console, unless you want to shell out $1100 for a bundle at Fry's, is eBay. As of this writing there are over 7,000 up for auction, looking for a good home.

The Grand Conclusion, with a Personal Note
To be completely honest, when I first secured my PS3 preorder with GameStop the first thought in my head was the massive amount of money I could make from selling it. That's how I got approval from my girlfriend to put down the $100. The TMX Elmo had just been released and was selling for ten times retail price. I figured I could triple my money, pick myself up a nice flat panel HDTV...hell, I might even have enough left over for another PS3 once the dust cleared.

What changed? Well the more I thought about the PS3, the more articles I read, and the more videos I watched, until the gamer in me basically slapped the profiteer silly. The PlayStation 3 has real potential. Lair. Motorstorm. Resistance. Soon dreams of a giant TV faded away, replaced by the gnawing anticipation I'm prone to get whenever something big is going to happen in the gaming industry. That, and I got this gig at Kotaku. If you guys ever got wind of me eBaying a PS3 I'd never hear the end of it.

As it turns out my gamer instincts and the threat of hordes of angry readers steered me clear of potential disaster. Aside from a couple brief spikes, there is no way I'd have been able to pull off the television, and I know damn well I would have waited for Christmas like so many others did, only to lose even more.

The moral of this story? There's no such creature as a sure thing. The majority of eBay prospectors walked away from this experience with that lesson burned into the back of their brains. My suggestion for the future? If you want to gamble, go to Vegas. If you want to invest, try mutual funds. Leave the video game system buying to the gamers. We'll all be happier for it.

How I collected the graph data:
To track eBay sales I used a website called Terapeak, which is of of the most trusted eBay market research tools available. I looked at data for the US eBay site each day utilizing the keyword "PlayStation 3" in the Video Games/Systems category. I set the price range for $200 through $10,000 to weed out any artificially inflated auctions as well as any bogus "PS3 Buying Guide" type offerings. Keep in mind that the statistics provided are for both the 60GB and 20GB models combined. Many sellers neglected to specify which version they were auctioning, so weeding out one from the other was nigh impossible. Counterbalancing that slightly are auctions including games and extra controllers, which are also figured into the statistics.

While certainly not a completely infallible system, I believe it led to a more accurate overview of the eBay PlayStation 3 market than simply searching for PlayStation 3 and leaving it at that.

Using the same guidelines outlined above, I poked about for a few more interesting tidbits regarding system demand. For instance, auctions ending on or before November 16th, meaning preorders, had a 96.5% success rate. In the period after the system was released the figure dropped to 73%. Hazarding a guess I would say those figures are due largely in part to unrealistic reserve price auctions.

Time to spread some fear, uncertainty and doubt in the Valley! Here's why the Bubble Threat Level currently stands at Yelp Trademark Red:

• Yelp leads the new round of bubbliciousness with a $10 million injection from BenchMark Capital, and the social review site still isn't turning a profit, despite monthly traffic of 1.5 million unique users (which probably translates to over 3 million pageviews) on a commercial site primed for targeted ads. It's fun to see a bad business go down; it hurts to see a good business kill itself with excessive cash. [VentureBeat]
• Upcoming search engine Powerset, which impressed even me with its tales of "natural language search," makes search maven Danny Sullivan roll his eyes. [Search Engine Watch]
• Even the behemoth Wal-Mart, which foolishly entered social networking earlier this year, gives up after just three months. If they can't afford to run a dot-com, who can? [Ad Age]
• Only cranks believed that MySpace is worth $20 billion. But one of those cranks is one of the site's founder. [MySpace Report]

Photo by Yelpdotcom [Flickr]