Wal-Mart Stores said on Friday it will start selling certain models of Apple Inc's iPhone on Sunday, but the popular cell phones will not priced as low as some anticipated.

Wal-Mart plans to sell the black 8-gigabyte iPhone 3G model, which holds about 2,000 songs, for $197. The 16-gigabyte model, in black or white, will be priced at $297.

All of the phones require a new two-year service agreement from AT&T Inc or a qualified upgrade, Wal-Mart said.

Wal-Mart also said its stores could match local competitors' advertised prices during a promotional period.

Numerous websites had previously speculated that Apple would offer a 4-gigabyte model of the iPhone for $99 at Wal-Mart stores.

The phones will be available in nearly 2,500 stores beginning Sunday, December 28.-Reuters