Apple bets on stripped-down chic with new faster iMac

Wednesday, September 1st 2004, 11:10 am
By: News On 6

PARIS (AP) _ The latest computer in the iMac family literally puts Apple's trademark minimalism on a pedestal. The processor and drives are built into a sleek flat-panel display.

``A lot of people are going to be asking, 'Where did the computer go?''' said Apple Computer Inc. senior vice president Phil Schiller as he introduced the new iMac on the opening day of the Apple Expo in Paris.

Available in 17-inch and 20-inch versions beginning in mid-September, the new iMac looks like a 2-inch-thick monitor.

Inside, however, is a large hard drive, 256 megabytes of memory and an ultra-fast processor of the kind reserved until now for Cupertino, Calif.-based Apple's professional Power Mac desktops. CDs or DVDs disappear into the side of the white panel, as they are fed into a drive behind the screen.

The announcement ended days of fevered speculation about the launch, postponed from earlier this year because of inadequate supplies of the G5 processors made by IBM Corp.

Schiller said the basic 17-inch model, with a 1.6 gigahertz processor and 80 gigabyte hard drive, would be on sale at $1,299.

That matches the price tag of the first iMac model, a translucent all-in-one cathode-ray-tube design that sold 6 million units after its 1998 introduction and helped Apple draw a line under three years of losses.

But some analysts suggested the new iMac could be priced too high to become another hit.

``We've moved forward on the market by six years, and I would have liked to see a lower price point,'' said Roger Kay, a senior analyst with global IT consultancy IDC.

``I also don't know if an all-in-one has the same punch that it did in 1998,'' he added. ``I'm not sure it will be a slam dunk.''

Apple said the new top-end iMac, with a 1.8 gigahertz processor, 20-inch screen and 160 gigabyte hard drive, will go on sale at $1,899. All models feature three USB and two FireWire ports and can be expanded to 2 gigabytes of memory.

During his presentation, Schiller also gave demonstrations of key features of Tiger _ the next version of Apple's OSX operating system, due for release next year.

It was Apple that pioneered the use of point-and-click operating systems in commercial computing in the 1980s. But the company refused to license its software to other manufacturers and steadily lost market share to rivals using Microsoft _ a slide that accelerated with the arrival of Windows 95.

Apple's global PC market share slipped to 2 percent last year from 9.6 percent in 1991, according to IDC figures, but edged up again to 2.2 percent in April-June this year.

The company has scored some recent successes in its fight to remain a force on the desktop computer market. Apple says the runaway successes of its iPod music player and iTunes download site have helped boost computer sales.

The new iMac's design neatly complements the iPod's stripped-down chic, and it was pictured alongside the music player in the launch presentation.

``The new iMac is designed with the same sensibility and thought process that went into the iPod,'' Schiller said in an interview. But he denied that Apple had designed the iMac to woo iPod users.

The company exhausted its stocks of the last iMac model last month _ adding to concern among analysts over the launch delay, which meant the new iMac missed out on the key back-to-school shopping season.

Despite the success of the iPod and iTunes, Apple still makes 60 percent of its revenue from computers. Sales of iMacs dwindled to 217,000 units in January-March, the lowest total ever.

The new iMac will also be crucial to Apple's attempts to keep its stronger footholds in markets such as education, where it is facing a stiff challenge from Dell Inc., whose education market share topped 45 percent last year.

Apple's share of sales to schools and colleges slid from 38 percent in 1995 to a low of 13.2 percent in 2002, before recovering by almost a full percentage point by April-June 2004.

Apple posted a 6.2 percent increase in net earnings to $69 million for the year ending September 2003 on an 8.1 percent increase in revenue to $6.2 billion.

Some 70,000 people are expected to visit the 2004 Apple Expo, the company's main annual products showcase in Europe. CEO Steve Jobs is recuperating at home after successful cancer surgery on his pancreas and was unable to attend the show, which closes Saturday.