Retailers say $799 iMac coming

Aiming to stay competitive with falling PC prices, Apple Computer plans on Saturday to bring back a $799 iMac to retail shelves, according to retailers familiar with the company's plans.

While Apple's retail prices have started around $1,000, the computer maker had been offering a $799 model in the education market. That model, which is now headed to stores, comes with 64MB of memory and does not include a rewritable CD drive. Currently, the lowest-cost retail iMac is a $999 model with 128MB of memory and a CD-RW drive.

The move does not break new ground for Apple, which had offered a $799 iMac until early this year. In February, the entry-level price rose to $899, and when Apple made CD-RW drives standard in July, the lowest-cost option rose to $999.

At the time, analysts criticized Apple for raising the entry-level price when prices for other home computers were falling.

Still, one retailer said the new $799 model is not likely to be a huge seller.

"It's a pretty stripped-down model," the retailer said. "This is not a killer machine that flies off the shelves."

However, a lower priced option that is more competitive with prices in the Windows PC market could help bring in more customers, the reseller said.

Convincing potential customers to spend a couple hundred dollars more for a machine with more memory and a CD burner should not be too difficult, the reseller added.

Apple representatives did not immediately respond to requests for comment.