Steve Jobs has taken the wraps off Apple's secret weapon to re-enter the consumer market: a $1,300 Mac with a space-age, see-through plastic case that glows when the power is turned on.
The new machine, called the iMac, will be available in August. It targets the 10 million consumers who own Macs today but have been slowly defecting to cheaper Windows PCs.
The iMac has the same all-in-one design as the original Mac that Jobs launched in 1984, complete with a handgrip in back to move the box around.
And like the Mac Classic, the iMac - the "i" is short for Internet - is designed as a complete system that consumers won't open up to plug in circuit cards.
But with its 15-inch color screen, 233-megahertz G3 processor and large disk drive, the iMac is a rounder, turbo-charged version of the old, square Mac.
Mitch Mandich, Apple senior vice president for sales, likened the iMac to the new Volkswagons that are modern versions of the utilitarian VW Beetle.
He said Apple will increase manufacturing to turn out iMacs for the back-to-school buying season, "but demand will probably be overwhelming for a while."
Kim Brown, an analyst with Dataquest in San Jose, said the iMac is the most aggressively priced Mac in years.
"These things should sell like crazy," Brown said. "It's close enough to the thousand-dollar PCs to make the Mac competitive."
The iMac carries about the same price as many comparably equipped systems using Pentium-class chips and Microsoft Windows. And it has some technical advantages over other low-priced PCs. The Apple PowerPC chip is said to be more powerful than an Intel Pentium rated at the same speed, and the iMac benefits from extra memory for storing frequently used information.
The system's weak point might be the 33.6 kbps modem, which is slower than the 56K modems included with most new PCs.
Eric Lewis, an analyst with International Data Corp. in Mountain View, said Apple also took a risk by not installing a floppy disk drive in the iMac.
"Perhaps there will be a third-party external disk drive that you can add on, but consumers have been used to getting floppies on the computers," he said.
Lewis said the iMacs will also use a new connector, the Universal Serial Bus, that won't work with old printers or other external devices, forcing iMac buyers to shop for new peripherals.
A key question is whether the iMac will still be a bargain when it makes its debut in August, because PC prices should continue their steady declines.
Brown said the iMac might cannibalize sales of Apple's more expensive - and more profitable - desktop products.
In recent years Apple has been harmed by bloated product lines and higher prices than competing PCs, leading to steep declines in sales. The company's market share had fallen to about 3 percent from as high as 9.4 percent a few years ago.
Jobs, who co-founded Apple, said its share of the personal computer market grew to 4 percent in its fiscal second quarter, which ended March 31, up from 3.4 percent in the prior quarter, XTC based on figures from International Data Corp.
Jobs said that next year Apple will come out with a low-cost portable running the Macintosh operating system, but gave no other details.
Pub Date: 5/11/98