February 1, 2001 11:10 AM PST

Apple: We expected to sell 3 times more Cubes

Apple Computer had already acknowledged that sales of the Power Mac G4 Cube have been lower than anticipated. But Wednesday, the company revealed that demand has actually been one-third of what it expected.

"The Cube has found a definite market," Chief Executive Steve Jobs told financial analysts at a gathering Wednesday in Cupertino, Calif. "The disappointment to us was the market wasn't as big as we thought."

The lack of demand has led to a glut of the models, which were released in July. In the company's earnings conference call two weeks ago, executives said the company had been able to get back to near-normal levels of inventory on most products by the end of the October-to-December quarter, but that it would probably take until March to sell the excess Cubes.

Because retailers and distributors were awash in Cubes, the company shipped only 29,000 of them in the December quarter. By contrast, Apple shipped 308,000 iMacs.

PC Data analyst Steve Baker said that although the Cube looks great, it doesn't offer the type of features one would expect on a machine that pricey. The entry-level Cube was priced at $1,799 when it was introduced in July. It has since been discounted with rebates and price cuts to $1,499.

"Sometimes when you get overly focused on the cool end, you forget it's a product," Baker said. "I think that's what happened with the Cube."

Still, Jobs reaffirmed Wednesday his commitment to the unit, noting that the model appeals mostly to high-end consumers who appreciate its compact size and sleek design.

"We're going to go on selling it to that group of people," Jobs said.

Baker said the company has its work cut out for it.

"You've got to get rid of what you've got and then come up with a plan to make the line more attractive," Baker said.

 

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