Is Apple seeing double?

In late March, several dealers, who asked not to be identified, said that distributors had informed them Apple would stop selling the 667MHz Power Mac in April. On Friday, the company pulled the model from its online store.

Typically, Apple clears out older models before releasing new ones. More recently, Apple dealers slashed prices on the oldest dual-processor Macs--450MHz and 500MHz models--in yet another sign new models could be coming, analysts say.

"You have to get rid of the old to make room for the new," NPD Intelect analyst Stephen Baker said. "Apple isn't any different in that respect than anybody else."

But Apple also could just be pruning its product line. Sources close to Motorola, which supplies PowerPC processors to Apple, said manufacturing yields of the 733MHz processor are not only higher than expected but way ahead of schedule. With more 733MHz processors available, Apple could simply be getting rid of a less-desirable clock speed.

"It harks back to a (press) release we made awhile ago, when we announced a new (model) of the 733MHz configuration due to the fact Motorola had made improvements to their processes and dramatically improved supply of the 733MHz chip," said Apple spokeswoman Nathalie Welch.

In fact, Apple added a second 733MHz model in early March, replacing the DVD recording drive with a CD-rewritable drive. At $2,999, that model sold for just a few hundred dollars more than the 667MHz Power Mac.

Welch would not comment on future products, but emphasized that because of "strong demand for the 733MHz chip, Apple discontinued orders on the 667 configuration."

Older model fire sales
Still, Apple has recently stepped up efforts to clear out older dual-processor models sitting on dealer shelves. Online and catalog retailer MacConnection on March 30 cut prices on dual-processor 450MHz and 500MHz Power Macs, company spokesman Matt Cookson said. MacConnection is out of stock on dual-processor 500MHz models but has plenty of dual-processor 450MHz Power Macs available. MacConnection and other Mac dealers are advertising the dual-processor 450MHz for $1,799 and the dual-processor 500MHz for $2,199.

Baker noted that Apple has consistently dropped prices on these dual-processor Macs since December, when the 500MHz model sold for an average of $3,299 and the 450MHz one for $2,421. By February, the average dual 500MHz machine sold for $2,396 and the dual 450MHz for $1,942.

Overall, Apple has more older dual-processor Power Macs on dealers' shelves than any other model, according to NPD Intelect. Apple ended February with just under a month of inventory of dual-processor 450MHz systems and 15 days worth of dual-processor 500MHz Power Macs. By contrast, stores stocked less than two weeks of the top-selling 466MHz Power Mac, which packs a single processor. For all desktop models, Apple started March with about three weeks of inventory on dealers' shelves, according to NPD Intelect.

This contrasts sharply with the fourth quarter's inventory crisis, when Apple had more than 11 weeks worth of stock in stores, according to market researcher ARS.

Baker noted that the more normal inventory levels had to due with "Apple not replenishing new models more than strong sales."

Dual-processor power
For Cupertino, Calif.-based Apple, getting faster dual-processor systems out the door could be crucial to driving sales of Mac OS X. The new operating system--the first complete overhaul of Mac OS in 17 years--is designed to take advantage of multiple processors. Mac OS 9.1, by contrast, recognizes but does not use a second processor, although some software applications can.

"Mac OS X can take advantage of two processors in a way Mac OS 9 can't," Technology Business Research analyst Tim Deal said. "Right now, Apple needs all the margins it can get from Mac OS X."

Apple Vice President Phil Schiller told CNET News.com in March that "multiprocessing is really important, particularly to the Power Mac lines."

Apple reintroduced dual-processor Power Macs last summer, touting the value of getting a second chip for free as the company kept prices level with older models. But Apple's postponement of Mac OS X's release limited the new systems' usefulness for the majority of Mac users, Deal said.

Because of chip supply issues, Apple in January largely backed away from offering dual-processor systems. As first reported by CNET News.com, the company unveiled 466MHz, 533MHz, 667MHz and 733MHz machines during Macworld in San Francisco. At the time, Apple offered one dual-processor 533MHz model, but did not promote it alongside the other new Power Macs. That system now gets equal billing with other Power Macs sold through the Apple Store.

Sources close to the company said Apple may be preparing to unveil a dual-processor 667MHz or 733MHz Power Mac G4, possibly during the National Association of Broadcasters show April 23 to 26. But other sources suggested Apple CEO Steve Jobs could announce new models during the company's first-quarter earnings conference call Wednesday.

If Apple does bring out new models now, it would be a step in the right direction, NPD Intelect's Baker said. Typically, Apple introduces new models at the various Macworld trade shows.

"People anticipate them coming out with new products at specific times of the year, and that freezes up the market and makes it difficult to sell old products," Baker said. "They may be trying to break away from that and bring out models with shorter life cycles."