October 15, 1999 4:00 PM PDT

Apple turnover: Company retreats from G4 decision

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Apple's chip shuffle upsets some customers

October 14, 1999
Apple is partially reversing its decision to hike prices on its G4 computers, the company said today.

Apple said that customers who had placed orders directly with Apple for G4 Macintosh computers prior to Wednesday would receive their computers at previously announced prices.

However, Apple may not win for losing: The move is likely to rankle customers who ordered systems through third-party resellers, because they don't qualify for the lower, original prices.

During Apple's earnings call on Wednesday, the company said that in order to meet demand for the computers, it would ship all G4 computers with slower chips, but not lower the prices. Effectively, this imposed a price hike. Apple also canceled all existing orders.

For instance, an Apple Store customer who previously ordered a 450-MHz system for $2,499 would have had to reorder a 450-MHz system and pay $350 more.

That move irked a number of customers, and today Apple said it was partially reversing its decision.

"We are honoring orders from a small number of individuals that were placed before we made the change," said an Apple spokesperson. In other words, customers who ordered a 450-MHz system for $2,499 would get what they ordered. Since a 500-MHz version of the G4 processor won't be available until the first calendar quarter of next year, customers ordering that system are being offered either a 450-MHz system for $350 less or any other system offered at the original prices before October 13.

However, customers who didn't order directly from Apple will still apparently have to pay the same price for slower computers, according to resellers and other sources close to Apple.

Resellers that have talked to CNET News.com said they have already dealt with a storm of angry emails and calls about the situation and have had to change all outstanding orders to reflect Apple's new pricing policy. Those customers will not be affected by today's announcement.

"We are sorry about the inconvenience this has caused our valued customers. Fortunately, most of our customers understand we need to do this to meet demand. Almost all the customers we have heard from are reordering," the spokesperson said.

The company only shipped 64,000 G4 systems during the quarter, less than half the number Apple had predicted, because it said Motorola was unable to make enough of the fast versions of the processor. Apple also is enduring a shortage of iBook notebooks.

 

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