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Will iMac ripen business for Apple?

iMac August 15, 1998
Web posted at: 11:45 a.m. EDT (1545 GMT)

SAN JOSE, California (CNN) -- A fresh Apple arrives in stores Saturday, but it remains to be seen whether consumers will pluck the company's newest machine off the shelves.

The iMac -- the first PC that Apple Computer Inc. has made specifically for home users in six years -- has a futuristic design and a price tag of just under $1,300. The iMac's price is comparable to Windows-based machines.

With 150,000 advance orders and a $100 million advertising budget to keep up the momentum, Apple should be able to hold on to the faithful.

But analysts aren't sure whether the iMac will win over new converts to Macintosh, or even lure back Mac users who've strayed to other PCs. And Apple's future depends on whether it can broaden its customer base.

  • The iMac's here, but where's Apple?
  • iMac sales boost Apple now, but longevity still uncertain
  • The iMac brings a lot of flash and performance, but has yet to address worries about available software and Apple's relevance, since it now has only a 3 percent share of the computer market.

    The Apple of merchants' eyes

    On price alone, iMac, which includes a monitor, has a shot at competing with Windows-based machines. A computer built around Windows 98 can cost less than $1,000, but doesn't come with a monitor that costs at least $200.

    Apple's chief marketer, Phil Schiller, said that in the first seven days the company took orders this month, retailers called for 150,000 machines. He said that was the largest number of advance sales the company ever had, beating the original Mac in 1984 and the Power PC line a decade later.

    Retailers said consumers have been asking about iMac ever since its unveiling in early May -- and signing up for them.

    "We've had more demand for the iMac than we have seen for any computer in (our) history," said Jeff Walker, vice president of retail sales for ComputerWare, a 13-year-old Macintosh-only chain based in Silicon Valley. "It's just phenomenal."

    Will customers switch?


    Despite the expected success of iMac, several questions remain.

    Some would-be buyers may balk at its lack of a floppy drive and the absence of familiar connections for a printer or other devices.

    But Apple is vigorously wooing first-time computer buyers by highlighting iMac's speed, simplicity and Internet capabilities -- the "i" in iMac.

    The company also hopes iMac will entice back some of the former Macintosh users who defected to rival computers using Intel Corp. chips and Windows software.

    But once Mac users have made the switch to Windows, they need a compelling reason to return, said Rob Enderle, an analyst with Giga Information Group in Santa Clara, California.

    "The iMac is a reason to move back, but it doesn't solve the problems that made people switch in the first place," he said.

    Doubts about software availability make it difficult for customers to pony up the money for a Mac when a Windows-based machine is often cheaper. And with its low market share, Macintosh is simply seen as a fringe product line by many shoppers.

    Doubts about Apple's survival in recent years further cut into its standing among computer buyers. Hot sales of the iMac could be Apple's best shot at regaining respectability with consumers.

    Speed demon

    The company claims that iMac's 233-megahertz microprocessor outperforms rivals' high-end PCs with a 400-Mhz Pentium II chip from Intel.

    But iMac lacks an internal floppy-disk drive, which allows users to copy data on inexpensive 3.5-inch diskettes. Schiller said -- and some Mac users agree -- that people don't use floppies as often as they once did, instead storing files on external drives and exchanging data over networks. Users will be able to add external floppy drives.

    The new machine also doesn't have standard ports for peripherals, relying instead on new, Universal Serial Bus connections that promise to make adding printers, joysticks and other devices easier. USB is expected to become the new standard, but few USB peripherals or adapter devices are available yet.

    But Apple's betting the typical iMac user wouldn't care much about those features.

    "The people who are going to use (iMac) are just going to plug them in," run simple programs and surf the Internet, Gibson said.

    The Associated Press contributed to this story.

    Copyright 1998   The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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