Walmart has announced that it will be dropping the price of the 16GB fourth-generation* Wi-Fi iPad to $399, and offering a 16GB iPhone 5 for $127, effective today, substantial price cuts that are surprising at this early stage of both products’ availability. Additionally, the fourth-generation* iPad will also come with a $30 iTunes gift card starting on Monday. The 16GB iPhone 4S has also seen its price cut today to $47 — both iPhone price cuts are valid with the typical two-year contract. These discounted prices are only available in retail stores, and not available online.

Updated: Although iLounge contacted Walmart before posting this story to confirm that the $399 pricing did, in fact, apply to the fourth-generation iPad – and received unambiguous written confirmation of that detail from a spokesperson – the company has now retracted the claim, suggesting that the $399 price applies solely to the third-generation iPad.

From Walmart’s spokesperson: “The iPad model on sale is the fourth-generation iPad currently in stores (not the iPad 3). Rollback prices on the iPhone and iPad are effective today, not Monday, with the $30 iTunes card added in beginning Monday, Dec. 17.” iLounge recommends that disgruntled customers contact Walmart directly to see if they can get the advertised price offered.