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Apple cuts PowerBook prices to compete

Apple is trailing other computer makers who have been aggressively dropping prices on mid-range and high-end notebooks.

Apple slashed prices on its PowerBook G3 notebooks this weekend, but it's playing catch-up with prices.

With the introduction of the $1,299 iMac desktop computer, Apple finally removed a barrier for customers previously deterred by the significant price difference between Macs and Intel-based PCs-- and watched its sales soar as a result.

But in the notebook computer market, Apple is trailing other computer makers who have been aggressively dropping prices on mid-range and high-end notebooks.

On Saturday, Apple discounted four of its notebooks by up to $600, bringing its high-end system with an extra large 14-inch display, 300-MHz processor, 64MB of memory, and DVD-ROM drive to $4,399. A hefty discount, to be sure, but not enough to beat the prices of similar PC notebooks.

"Honestly, Apple hasn't been all that spectacular in this area," said Matt Sargent, a consumer hardware analyst with ZD Market Intelligence. "They haven't done in the notebook area what they've done with the iMac in the desktop area."

"They may be trying to close the gap, but they're not even in the same ballpark yet," Sargent said.

For example, Dell's Inspiron 7000 and Gateway's Solo 5150LS both offer Intel Pentium II 300-MHz processors, DVD-ROM drives, and similar hardware and displays for under $3,600.

"If they ever want to take market share away from Windows," Apple must erase the pricing disparity, Sargent said. Apple only recently broke into the top 10 notebook vendors, according to market research firm Dataquest, shipping 48,000 units and accounting for 3.3 percent of the market in the third quarter of 1998.

"They're still not there yet, but I don't know if they want to be," Sargent said, referring to the less attractive profit margins that are part of the low-cost equation.

Apple's new pricing does stack up well, however, against systems such as IBM's popular Thinkpad 600: For $4,349, this comes with a Pentium II 300-MHz processor, DVD-ROM drive, and 13.3-inch display. Or a Compaq Armada 7800 which comes with similar hardware for about $4,850.

Apple also discounted three other notebooks on Saturday, including a system with 14-inch display, 233-MHz processor, 32MB of memory, and 2GB hard drive, by $300 to $2,499. "We're building on the success of the past year," said an Apple spokesperson. "We're maintaining an aggressive stance of providing a great performance to price ratio."