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Apple to cut prices, unveil servers

Later this week, Apple will lower prices on its popular Power Macintosh G3 machines and also release new server computers.

Apple Computer (AAPL) is set to lower prices on its popular Power Macintosh "G3" machines, and will also release new server computers, a new product twist for Apple.

In addition to price cuts ranging up to about 17 percent, Apple

An Apple server
G3 servers will come in a similar minitower package
will roll out new low-end servers based on the G3 processor, as part of its strategy to provide servers to the education and business markets.

Price cuts will come in desktop and minitower versions of its Power Macintosh line. Apple will lower prices on the basic G3 desktop system with 233-MHz PowerPC 750 chip, from $1,999 to $1,699, according to industry sources familiar with the announcement. A G3 minitower with 233-MHz PowerPC 750, built-in modem, and extra communications software will be priced at $1,999, a reduction of $150.

The biggest price reduction is reserved for the G3 minitower system with a 266-MHz PowerPC 750. The system was priced at $2,999, and will be cut 16.6 percent to $2,499. A 266-MHz desktop system is now priced at $2,299, and will be priced at $1,999.

The popularity of the new G3 systems helped propel Apple to a first quarter profit. Company officials have noted that the second quarter is typically a slow one, but the price cuts could keep systems sales relatively high. Nevertheless, some resellers are beginning to experience shortages of products such as the G3 notebooks, and the older Power Macintosh 8600 and 9600 systems are also getting hard to find in some areas.

The servers mark Apple's renewed interest in a market which it has lately not been particularly active. A visit to the company's online storefront reveals that Apple currently doesn't offer any servers.

That will change later this week when Apple introduces workgroup servers with either a 233-MHz or 266-MHz PowerPC 750 processor, a CD-ROM drive, high-performance 4GB hard drives, and built-in networking capabilities. Prices are expected to be around $3,700 for the 233-MHz model and $4,900 for a 266-MHz system with dual hard disk drives, sources said.

Meanwhile, Apple is experimenting with bringing build-to order capabilities to its resellers, industry sources said. The company promised back in November of 1997 that resellers would have the ability to sell custom-configured G3 systems, much as Apple now allows individuals to configure computers they buy online from Apple.

Apple is offering some resellers a limited number of configuration options as the company debates whether to allow reseller partners to configure the systems themselves or continue requiring orders to be shipped complete from Apple, sources said. It has been expected that full build-to-order capabilities for resellers could come by March.

Education customers may have similar options soon. It is rumored that Apple might unveil a new online store for education customers this week, which would allow schools to purchase custom systems through their own personalized Web sites. Currently, schools buy systems direct from Apple representatives, or they can use the more generic Apple Web site.