January 6, 2002 9:35 PM PST

New iMac features flat-panel display

The new iMac looks like a desk lamp.

Apple Computer will unveil a new iMac on Monday that sports a 15-inch flat-panel display connected by a pivoting arm to a half-dome base, resembling a luxo desk lamp, according a report published in next week's issue of Time magazine.

The introduction of the original iMac fueled Apple's resurgence into the consumer market, also ushering a new era of computer design. Apple apparently hopes to repeat the magic with the successor, with prices that range from $1,299 to $1,800, with the high-end version containing a DVD burner, according to Time.

Apple had been baiting the public for a week about a big announcement, which is to be made Monday during CEO Steve Jobs' Macworld Expo keynote address in San Francisco.

But Apple apparently gave the story to Time, which put the new iMac on its cover. MacMinute broke the story after obtaining a copy of the Time article. The issue went on sale at New York newsstands late Sunday.

Apple spokeswoman Natalie Sequeira declined to comment on the new model ahead of Monday's announcement.

Besides the new iMac, Apple apparently will announce new consumer photo-editing software Monday. Dubbed iPhoto, the program also packs a service component. Apple will create a hardcover 10-page book of photos for consumers willing to pay $30, according to the Time article.

Apple hopes iPhoto will do for handling photos what iMovie 2 does for amateur video production and iTunes 2 for managing and listening to digital music.

Throughout 2001, Apple positioned Macs as a hub for connecting to digital camcorders, cameras and music players. The company delivered software for editing movies, listening to digital music and authoring DVDs. In October, Apple delivered its first device playing off the marketing theme, the iPod digital music player. Several Mac dealers rated iPod as one of their top-selling holiday products.

Still, the star of Macworld will likely be the new iMac. Rumors that Apple would deliver a flat-panel successor to the iMac have been circulating for more than six months. In fact, many Mac fan sites predicted Apple would release iMac's successor in time for the holidays.

But the first signs Apple would finally deliver the new model came in early December, when Morgan Stanley analysts Gillian Munson and Sterling Levy reported Apple had placed component orders for about 100,000 flat-panel iMacs per month.

During last January's Macworld, Apple introduced the first Power Macs with drives for recording movies to DVDs that can be played in consumer players. Since then, Compaq Computer, Hewlett-Packard and Sony have added DVD recording drives to their consumer models.

The larger question: Other than the first iMac, all-in-one computers haven't been huge sellers. Gateway has tried a number of times with the Profile series to popularize the concept, but only enjoyed limited sales. Apple also won't be the first company to combine a PC with a flat panel monitor. Gateway did it with it with one in the Profile series that resembles a terminal.

IBM has been selling the all-in-one NetVista X, which comes with an integrated flat panel with an optional crane arm similar to Apple's new PC, for more than a year. IBM came out with a new model last April. Later this year, Compaq and others will come out with TabletPCs, portable PCs that look like Etch-a-Sketches.

All-in-one flat panels also have some service drawbacks. If the hard drive or memory kicks out, it can be difficult to fix the PC. IBM cured that problem by making the flat panel removable on its latest Pentium 4 NetVista.

Apple's 2002 could largely hinge on the public acceptance of the iMac. Most other PC companies woo consumer customers through price cuts and corporate customers with the continual need to upgrade their technology. By contrast, Apple tries to win customers through style and ease of use. In that sense, the company operates almost like a film studio, dependent on regularly turning out a hit product.

The original iMac in 1998 brought the company back from the brink of possible extinction, and for a time it was the most popular consumer PC.

The G4 cube computer, however, found few takers because of its relatively high price. Sales slowed further when consumers reported cracks in the sleek case and mechanical problems. The first iBook sold moderately well, but then took off after a redesign in 2001.

Analysts and dealers have said a change is long overdue. During Apple's fiscal fourth quarter, which ended Sept. 30, iMac sales plummeted 49 percent compared with the prior year and were down 4 percent from the previous quarter.

Don Mayer, CEO of Waitsfield, Vt.-based Small Dog Electronics believes that if the design and features of the new iMac are compelling enough, buyers won't hesitate to choose the new model over a notebook.

"I think it has to have the same wow factor as the iPod," he said. "You have to look at it and say, 'Wow, that's really different. There's some real industrial design there.' If it comes out and looks like their Studio Display and is sort of ho hum, that's another thing. If it has the kinds of bells and whistles Apple knows how to add, it could be a huge hit."

In terms of price, Apple is close to the existing competitors. The new iMac with a recording DVD drive will cost $1,800, according to Time. IBM's NetVista X41 sells for $1,699 and comes with a 1.6GHz Pentium 4, 128MB of memory, a 15-inch screen and a standard CD-ROM. Adding the rotating crane arm adds another $219. Gateway's Profile 3CX, meanwhile, sells for $1,699 and comes with a 1.2GHz Pentium III, 128MB of memory and a CD-RW drive.

Apple's computer resembles IBM's NetVista X series the most out of existing competitors. This also would not be the first time Apple followed an IBM design innovation.

IBM was the first major manufacturer to come out with notebooks with titanium-reinforced cases in April 2000. Apple then followed with a flashier use of the metal with the Titanium PowerBook in January 2001 that came in a shiny steel all-titanium case.

 

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