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Apple packs everything into très thin new iMac

By Mike Musgrove
The Washington Post

FRANCOIS MORI / AP The Apple Expo in Paris opened yesterday, giving attendees a chance to examine the company's new desktop computer. Its minimalist look was designed by the same team that produced Apple's wildly popular iPod digital music player.

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Philip Schiller, Apple's senior vice president for worldwide product marketing, touted the new iMac in his keynote speech at the Apple Expo as "the world's thinnest desktop computer."

"A lot of people are going to be asking, 'Where did the computer go?' " said Apple Computer Senior Vice President Phil Schiller as he introduced the new iMac yesterday, opening day of the Apple Expo in Paris.

The iMac G5s are coming to the market months later than planned. Apple told investors in July the new line was delayed because of a shortage of G5 processors from IBM.

What's more, Apple sold out of its previous line of iMacs in July, meaning the company missed having an iMac on the market for the back-to-school season.

Where sales have been climbing for other products in Apple's lineup, they had fallen off for the iMac before the inventory problem — down 15 percent in its most recent quarter, which ended in June, compared with the same period a year ago.

	A visitor takes a photo of a dismantled iMac G5, which features a G5 processor and a design that integrates the entire computer into the flat-panel display.

Apple blamed the previous iMac's aging, 2-year-old form as a factor for the weak performance.

Sales for its PowerBook laptop line climbed 37 percent, by comparison.

Apple hopes the new machine's fresh look will help it make up lost ground during the holiday season.

Schiller's description of the computer, posted on Apple's Web site, detailed nearly every design choice, ranging from the placement of the power button to the number of screws holding the case shut (three). Available in 17- and 20-inch versions, the desktop starts at $1,299.

Some analysts speculated Apple is trying to associate its new desktop with its iconic iPod digital music player. The computer, designed by the same team, has a similarly minimalist look, and promotional pictures of the iMac G5 at Apple's Web site showed the two white devices side by side, in profile.

"It's no accident," said Stephen Baker, an analyst with NPD Group. "This is a case of the tail wagging the dog — sales of the iMac are being driven by the iPod."

Though Apple holds only a sliver's worth of the desktop-computer market — 2 percent, by some estimates — it is often regarded as having a disproportionate influence on the consumer-tech industry.

Mac enthusiasts and Wall Street generally approved of the new desktop. Merrill Lynch analyst Steven Milunovich bumped up his projections for Apple's annual financial performance following the announcement, pushing estimated earnings from 87 cents a share on $9.3 billion in revenue to 90 cents on $9.5 billion in sales — and rated the stock a "buy." Apple shares closed at $34.49, up 37 cents.

Though most of the chatter at Mac sites gave the new design a thumbs up, some people wished Apple offered a cheaper version.

The unveiling came after days of intense speculation on Mac fan Web sites about Apple's coming desktop designs. "I have a hard time thinking of any other company where people spend time speculating about what the next machine will be," said Paul Saffo, a Mac user and research director of a Silicon Valley think tank called Institute for the Future.

"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."

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

Copyright © 2004 The Seattle Times Company

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