October 23, 2001 12:25 PM PDT

New York, Washington get iMac deal

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WASHINGTON--Apple Computer quietly has discounted one iMac model to $499 through dealers here and in New York, apparently in memory of those affected by the Sept. 11 terrorist attacks.

Many local dealers cheered the discount, which shaves $400 off the original price of the now-discontinued model.

"It's definitely a good thing that Apple did," said Sonny Tohan, vice president of Mac Business Solutions in Gaithersburg, Md.

"The response has just been unbelievable," he added. "The phone has been just ringing off the hook. The response is much more than what we expected."

Apple could not immediately be reached for comment.

Several dealers said Apple informed them of the promotion over the weekend.

"We are offering the 400MHz $499 iMac, and we expect to have them by Saturday," said Brad Gibson, marketing director for Bethesda, Md.-based MacUpgrades.

"We were told we were going to get them on Friday," Tohan said.

CompUSA outlets in Maryland and Virginia also plan to carry the model, according to salespeople. A salesman at Apple's retail store in Vienna, Va., said he just heard about the promotion Tuesday but knew nothing about the possibility of carrying the model. Not all dealers were thrilled with the promotion, with one accusing Apple of "dumping old inventory."

"That sounds a little like sour grapes," rebutted NPD Intelect analyst Stephen Baker. "Apple's got products, and they've got to get rid of them. I don't think that's untoward at all to give special deals to specific areas."

The discount gives dealers in the two areas most affected by the terrorist strikes one model to compete with low-cost PCs. However, Baker said the discount might not be enough.

"Pretty much, the low end of the PC market is a 1GHz processor, with at least a 20GB drive and CD-rewritable drive," he said.

The discounted iMac model comes with a 400MHz PowerPC processor, a 10GB hard drive, a CD drive, and a number of built-in features including a 15-inch monitor, Harmon Kardon speakers, a 56kbps modem, 10/100 networking, and USB and FireWire ports.

"Compared to a PC, that's not a great configuration," Baker said. "On the other hand, that's a configuration Apple has been successful with in the past."

Gibson acknowledged that "it's a bare-bones system. But for 400MHz at $499, you can't go wrong."

For people shopping specifically for an iMac, the 400MHz model could be a steal. The newer model, essentially the same but with a 500MHz processor and 20GB hard drive, sells for $799.

Gibson said that the promotional iMac would only be available for customers living in the immediate Washington, D.C., area and that buyers "will have to prove they live in this area with a driver's license or something like that."

The same rule applies to promotional iMacs sold in the New York area.

Dealers are taking different approaches to selling the models. Mac Business Solutions is limiting orders to three per customer, while MacUpgrades will let customers buy as many as the want.

"It's first come, first served," Gibson said.

When Apple introduced iMac three years ago it sparked a revolution in computer design and helped revitalize the company's sales. But the trend-setting design is showing its age.

Sales of iMac plummeted 49 percent in units and 53 percent in dollars during Apple's fiscal fourth quarter, compared with the same period a year earlier. Its fourth quarter ended Sept. 30.

Compared with its third quarter, sales of iMacs declined 4 percent in units and 5 percent in dollars.

 

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