Well, the reports were half right ... Wal-Mart will start selling the Apple (NSDQ: AAPL) iPhone Sunday in nearly 2,500 stores but not at the bargain rates some were predicting. With two-year AT&T (NYSE: T) plans, the black 8 GB model will run for $197, a mere two dollars lower than the usual $199, while the 16 GB model will sell in black or white for $297, a similarly small discount. Wal-Mart (NYSE: WMT) becomes the second retailer to gain U.S. distribution rights. Best Buy began selling the 3G phone earlier this year; until then, the iPhone was sold only at Apple or AT&T retail outlets. The retail expansion through Best Buy and now discount chain Wal-Mart should help Apple continue to move the iPhone beyond early adopter and gadget-head status into more ubiquitous use. The prices are far from the bargain speculated by some analysts, who thought Apple would match Wal-Mart’s discount reputation with a 4 GB discontinued model at $99. Release.

Update: I stopped by the nearest Wal-Mart Sunday morning. Good display space but no demo models visible.