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Stores cutting iMac prices

Best Buy and others cut hundreds of dollars off the price of Apple's snazzy computer in an apparent effort to clear out inventories.

Apple's iMac has dropped toward the $1,000 mark in time for the holidays.

National electronics retailer Best Buy has cut hundreds of dollars off the price of Apple Computer's snazzy iMacs this week in an apparent effort to clear out inventories.

Best Buy today is offering the iMac for $1,099 today in its outlets nationwide, according to a number of Best Buy sales representatives. Earlier in the week, the iMac was being offered for $999, and some Best Buy outlets say they will still honor the lower price if customers mention it. The iMac has been selling for $1,299 since its debut in August.

Best Buy is also offering bundling deals. The Best Buy store in Costa Mesa, California, has the system for $1,099, and is offering a system bundled with a Umax Astra 1220 scanner for $1,109 after a rebate. Other Best Buy outlets said they have the same deal.

Florida-based MacCenter is offering iMacs for $999 as well with the purchase of a qualifying peripheral such as a printer or scanner or extra memory, and it is offering the system for $1,099 as a standalone deal.

The relatively steep discounts on the iMac, which was difficult to find just a few months ago, appears to come as a result of an inventory glut at Best Buy, if not elsewhere.

"We've got tons of them," said one sales representative at another California store. "Best Buy bought five times more of them than anyone," he claimed.

Additionally, the attempt to reduce inventory comes as Apple readies new iMacs with faster chips and larger hard disk drives for introduction early in the first quarter of 1999.

While the discounts are good for customers, price moves by Best Buy are beginning to roil other Apple dealers, who are holding to the $1,299 price.

One executive with a nationwide reseller, who wished to remain anonymous, said his company was getting tons of calls from customers wanting a $999 iMac, but that he hadn't heard anything official from Apple about whether or not he was allowed to price the system that low. Authorized Apple resellers are normally held to a policy of not advertising products below a certain level in return for advertising dollars.

CompUSA stays at $1,299
CompUSA, one of Apple's biggest national retailers, is selling the machines for $1,299. Representatives, however, indicate that the computers are now much easier to find. The San Francisco outlet of CompUSA, for instance, said that they had 90 of the machines in stock, according to store representatives.

An Apple spokesperson said that Apple announced no price cuts.

Overseas in Singapore, NatSteel Electronics is expected to stay busy in the normally quiet first quarter after Christmas, as it reportedly ramps up production for new products from Apple.

"Apple's new product [the updated iMac] will ramp up some inventory and that will keep [NatSteel's] production lines occupied in the first quarter, which is usually weak," said Pranab Kumar Sarmah, an analyst at Daiwa Institute of Research.

NatSteel, the world's sixth-largest contract manufacturer of electronics products, relies on Apple for a fifth of its sales.

Bloomberg contributed to this report.