June 29, 2000 2:05 PM PDT

Reports spread of new iMacs coming out next month

Cyclical inventory patterns suggest Apple will revamp the iMac next month, say analysts and resellers, with the debut of other new computers possible at July's MacWorld Expo.

The Cupertino, Calif.-based computer maker is apparently clearing out inventories of iMacs and encouraging dealers to get rid of stock on hand, a sign that new models are on the way.

More special iMac bundles are being advertised than in the past. Prices have also dropped in certain locations.

Discount retailer Costco, for instance, is now selling standard iMacs for $949 as well as the more upscale DV Special Editions for $1,449, $50 less than what Apple sells the machines for on its Web site. One Costco outlet said the store began selling iMacs roughly a week ago.

"We think Apple is stocking (the) channel with old products in order to stop production and prepare for new products as it has before," Morgan Stanley Dean Witter analyst Gillian Munson wrote in a note this week. MacWorld, which takes place July 18 through July 21 in New York, should mark the start of a new product cycle for Apple, she said.

One prominent Macintosh reseller said that the company is suggesting to dealers that they clear out their iMac inventory by the time MacWorld rolls around.

Apple executives were not immediately available for comment.

Upgrading the iMac, which has remained essentially unchanged since last October, makes sense, said analyst David Bailey, who covers Apple for Gerard Klauer Mattison.

"It's impossible to know for certain what Apple is going to do because they do such a great job of keeping hardware plans under wraps," Bailey said.

Apple has typically used the annual New York show to debut new hardware, especially consumer computers. At last year's show, Apple chief executive Steve Jobs used his keynote to unveil the portable iBook and the AirPort link to allow Macintoshes to exchange data wirelessly.

Two years ago, the show served as the coming-out party for the original iMac, which turned Apple's fortunes around and helped kick off a craze for translucent plastic gadgets.

Among the features rumored to be part of the new iMac is a larger, 17-inch monitor. Currently, iMacs come with 15-inch monitors. Future iMacs are also expected to come with wireless keyboards and mice.

Then again, history shows that preshow speculation and eventual product releases often don't match. Last year, Apple watchers predicted an iMac with a 17-inch monitor might come out in 1999. It didn't. The gray shell that comes with the DV iMac was rumored long before it ever got released. Other metallic iMac prototypes were shown internally at Apple but never emerged.

Apple and Palm have also had discussions about producing a handheld. Mock-ups of an Apple-branded Palm have been shown at meetings at Apple, sources have said, but again, no products have been released.

Bailey said he also expects Apple to update its PowerMac desktop and PowerBook notebook lines in the second half of this year, although not necessarily at MacWorld.

Software will likely be a key focus at MacWorld. In particular, Mac fans are hoping Apple will hand out a test version of its new OS X operating system.

Apple has promised that a widespread "public beta" version of the new OS will be available this summer, with a final commercial version going on sale in January. Earlier, the final commercial version was expected to emerge this year.

The new operating system is based on an open-source core, known as Darwin, topped by Apple's sleek new Aqua interface. With open-source software, anyone can see and modify the original programming blueprints, or "source code," of a program.

Apple will report corporate earnings the week of MacWorld. Bailey said he expects the company to be in line or slightly ahead of expectations, with any gains coming from higher profit margins.

"We think they will tell a very bullish story about the second half (of the year)," he said.

News.com's Michael Kanellos contributed to this report.

 

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