Apple dangles rebates to spur iMac sales

With the mail-in rebate, the price of the 600 MHz iMac drops from $1,299 to $1,149, while the 700 MHz machine dips from $1,499 to $1,349. The free digital camera is Hewlett-Packard's Photosmart 318xi, which offers a resolution of 2.3 megapixels and can hold up to 80 photos on its 8MB flash-memory card. The camera sells for $200 on HP's Web site.

The promotion started Friday and runs through Dec. 31.

Separately, Apple is also offering an instant rebate through its U.S. online store when someone purchases a PowerMac G4 tower and one of the company's flat-screen monitors. People who buy a 733MHz PowerMac G4 and a flat-screen monitor save $100. Those who purchase an 867MHz G4 machine and the thin display save $300, and those who buy a dual-processor 800MHz G4 machine and a flat-screen panel save $500.

The offer is also available as a mail-in rebate if the combinations are purchased from a reseller. Like the iMac deal, the PowerMac offer started Friday and runs through the end of the year.

The new iMac promotion is similar to one Apple launched earlier this month in England. In that case, however, only the camera is offered, and it is available only with the purchase of a 500MHz iMac equipped with a CD-rewritable drive.

The promotions are comparable to those from other PC makers, such as Dell Computer, which has been offering free handhelds and other incentives to try to boost sluggish consumer demand.

For example, Dell's offers include a free CD burner or DVD drive with the purchase of most notebook or desktop models, as well as a $100 rebate on its Dimension 4300 models.

David Bailey, an analyst at Gerard Klauer Mattison, said the moves show that Apple is paying more attention to price, which he considers a good sign.

"The Wintel guys have been very aggressive," Bailey said, referring to PC makers, especially Dell. "Apple, particularly on the iMac, has been noticeably absent" from the price war.

For most of 2001, for example, prices for the entry-level iMac were rising--first to $899 and then to $999. Both machines did offer additional features, compared with their predecessors.

However, Apple recently started selling in the consumer market a $799 model equipped with a CD-ROM drive. The company previously had been selling the model only in the education market.

"It would be logical that (Friday's rebates) would be a precursor to announcing a new iMac in January," Bailey said. "It appears they are trying to get one last holiday season out of the (existing) iMac."

Even with the rebates, Bailey said, Apple and other computer makers face an uphill battle in wooing consumers this holiday season.

"It is very difficult for any of the major companies to convince consumers to buy systems given the economic climate," he said.