Intel Switch, Lower Prices Give Apple A New Edge

Apple recently rolled out a $999 iMac with a 17-inch screen, a 1.83GHz Core 2 Duo processor, 512 Mbytes of 667MHz DDR2 SDRAM (expandable to 2 Gbytes) and a 160-Gbyte hard drive. Previous 17-inch iMacs had a starting street price of $1,299.

The Cupertino, Calif.-based company also unveiled a brand-new, 24-inch wide-screen iMac. Priced at $1,999, the system sports a 2.16GHz Core 2 Duo processor with 4 Mbytes of shared L2 cache, 1 Gbyte of 667MHz DDR2 SDRAM (expandable to 3 Gbytes) and a 250-Gbyte hard drive.

Rounding out the upgraded iMac line are a 20-inch model with a 2.16GHz Core 2 Duo processor, priced at $1,499; and a 17-inch model with a 2GHz Core 2 Duo processor, priced at $1,199.

Apple VARs said the Intel-based Macintosh computers have been selling briskly all year.

George Swords, marketing manager at PowerMacPac, a Portland, Ore.-based Apple specialist, said the iMacs had previously been selling "ridiculously hot. Really, really selling well."

According to Swords, about 60 percent of the early adopters of the Intel-based iMacs were previous Mac users who are upgrading and "the rest are ex-PC people."

Apple's switch to Intel and more competitive pricing are spurring sales against rivals such as Dell, Swords said. "Moving to Intel was a wonderful thing to do," he said. "The [Mac OS X] operating system runs better on Intel than it ever ran on PowerPC."

Other Apple solution providers report similar response to the new Intel-based Macs, and some suggest that the Intel switch, the competitive pricing and a new route to the channel via distributor Tech Data, Clearwater, Fla., have worked to give Apple more of an edge in the SMB space.

For pricing, a look at the numbers shows Apple has dramatically changed its position against a key competitor.

Apple has been gaining ground on rival Dell in desktop pricing—an area where the Round Rock, Texas-based company was once the clear, dominant force in the industry.

Fueled by design enhancements and its switch to Intel processors, Apple has managed to cut pricing in its iMac all-in-one desktop series by an eye-popping rate over the past two years.

For example, in July 2004, an iMac with a 1.25GHz PowerPC G4 processor and a 17-inch monitor could be had for $2,448. That compares with the $999 model unveiled this month, which includes a 17-inch display and the 1.83GHz Core 2 Duo chip.

By contrast, in July 2004, a Dell Dimension 4600c with a 2.8 GHz Intel Pentium 4 and 17-inch monitor was list-priced at $909. This summer, it was priced at $889.