Apple looks to Macworld for jumpstart

InfoWorld |  Hardware

SHOWING ITS WOUNDS from the industrywide slowdown in personal computer sales, Apple Computer last week slashed prices across several desktop and notebook system lines. After warning of disappointing first quarter financial results last month, the Cupertino, Calif.-based company is hoping to regain momentum with the pricing action and with the buzz from new product announcements at this week's Macworld Expo in San Francisco.

Apple trimmed as much as $1,000 from some of its high-ticket systems. The high-end 500Mhz G4 Cube with 256MB SDRAM (synchronous DRAM) memory was shaved by $1,000 to $2,799. Entry-level prices for Apple's PowerMac G4 Cube were slashed from $1,799 to $1,499. The 500MHz PowerMac G4 was trimmed from $3,499 to $2,499. Entry level PowerMac G4 systems were cut from $1,599 to $1,299. The company also lowered prices on its notebook lines. The 450MHz PowerBook was reduced from $2,499 to $1,999, and the 500MHz version was cut from $2,999 to $2,199.

The cuts follow Apple's promises to reduce inventories and make room for new products and programs to be rolled out this year.

At the Macworld show, Apple is expected to roll out new high-end PowerMac desktop systems with faster processors as well as thinner and lighter PowerBook notebook designs, according to observers.

According to one analyst, the earnings troubles coupled with inventory backlog dictated action.

"Apple was bitten hard by a poor fourth quarter," said Kevin Knox, vice president of personal and distributed technologies at Gartner, in Stamford, Conn. "Apple has gotten themselves into a pretty bad inventory problem. The price cuts are their attempt to clear the decks to make way for some new products."

Additionally, because faster speeds and sleek designs alone will not grab the attention Apple is after, Knox said the company may shake things up by revealing a release date for the long-awaited Mac OS X or by introducing a flashy consumer electronics device, such as an MP3 player or a handheld.

"Apple needs to look long and hard at their fundamental business model, which is essentially selling into their own install base, and that is not expanding," Knox said. "Apple needs a long-term plan [for] how to get into new markets."

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