To encourage buyers to upgrade their devices before Apple announces new products, Wal-Mart and Apple are slashing prices on iPhones and iPods.

Wal-Mart will drop the price on the iPhone 5s and 5c, the most advanced iPhones currently available, from $149 and $49 all the way down to $99 and $49. A two-year contract is required from AT&T, Sprint or Verizon and each phone will be the entry-level 16 Gigabyte model.

Only Wal-Mart will offer these prices. At cell phone stores and the Apple Store, the price for a 16 GB iPhone 5s will maintain the $199 price.

Costco followed Wal-Mart's price reduction and is now offering a $77.99 iPhone 5s. This price is offered to Costco members only and non-members won't be able to purchase the phones without becoming a member. Memberships at Costco are about $50 per year.

Phone makers are trying to woo customers into updating their phones too. Last week, T-Mobile introduced a 7-day trial for the iPhone 5s. The customer signs up on T-Mobile's website with no money down. They are sent a new iPhone 5s and allowed to try it out for seven days. If they don't like the phone, they simply return it to any T-Mobile store.

Some customers may be waiting for iPhones to drop in price if a new model is introduced. In the past, Apple has announced new models in the month of September, so customers might be holding out.

Apple Drops Price on iPod Touch

Apple is dropping the price on its iPod Touch models and adding a rear-facing camera to the 16 GB model. Now, for $199 (was $229), the 16 GB model which only had a front-facing camera, is popping up on Apple's website.

The larger capacity 32 GB and 64 GB models have also dropped in price. The 32 GB now sells for $249 (was $299) and the 64 GB now sells for $299 (was $399).

The new iPod Touch 16 GB model will come without the $9 wrist strap. This will have to be purchased separately from Apple.