Apple Unveils Its Redesigned iMac
Apple Computer Inc. unveiled a stylish new version of its iMac desktop computer Monday, betting that flat-panel displays and a complete redesign will shore up its sagging position in a market dominated by PCs using Windows software from Microsoft Corp.
Apple Chief Executive Steve Jobs, whose biggest hit since returning to the company was the original iMac released more than three years ago, plans to target both iMac owners ready to upgrade to a faster, better-looking system and new computer users.
Apple followers said Jobs should have little problem with those audiences and with workers in creative industries because the iMac won’t be extravagantly expensive, costing between $1,299 and $1,799.
But the new design won’t be enough to lure many Windows users through the hassle of changing software and navigation habits, analysts said.
“It’s very close to what I think a desktop computer should be,” said analyst Rob Enderle of Giga Information Group. But unlike the first colorful and rounded iMacs, the new machines “are evolutionary, not revolutionary.”
Looking unlike anything on the market, the new iMacs have a 6-inch-high, off-white half-globe for a base that contains drives, high-end G4 processor chips and speakers. An adjustable metallic stalk connects the base to the 15-inch flat-panel screen, and the keyboard and mouse connect to the back of the base.
Some attendees at the MacWorld Expo convention that started Monday in San Francisco compared the contraption to a table lamp. One said it looked like a cosmetics case. And several said it reminded them of the Cube, a sleek and expensive Mac that bombed after production problems.
Apple marketing chief Phil Schiller said the Cube flop taught the company that consumers want flat-panel displays that come connected to the rest of the computer.
The new iMac had been expected months ago. Analysts said Apple had been waiting for flat-panel prices to come down to the $400 or so they cost computer makers now.
Traditional PC customers can assemble flat-panel machines from Dell Computer Corp., Gateway Inc. and others, with drives and other machinery housed in a tower. The prices are similar, but the styling is not.
“I love the new iMac,” said J.P. Morgan analyst Daniel Kunstler. “It will bring in some new customers, but the question is how quickly. It will be a bit more difficult this time around to bring new converts.”
Apple’s stock, which has gained 50% since Sept. 21, slipped 79 cents to $22.90 in Nasdaq trading.
Innovation has kept Apple going, but it hasn’t delivered hoped-for growth against the Microsoft desktop monopoly in commodity PCs. Apple’s market share has fallen to under 5% in the last few years, even as it introduced fresh and useful hardware and software.
As computer shipments dropped throughout the industry, Apple reported a loss of $25 million in its last fiscal year after three years of profit. Sales shrank from $8 billion to $5.4 billion.
“This might let them pick up 2% or 3% in market share, but going past 8% is a tough challenge for Apple, even in the long term,” said consultant Tim Bajarin of Creative Strategies. “I don’t care how cool the box is, the ability to shift a huge amount of Windows users to the Mac platform is just not a reality.”
Jobs said Apple has sold 6 million iMacs and 125,000 iPods, the MP3 players it began shipping Nov. 10. The last of the three types of new iMacs will begin shipping in March.
