Apple cuts G3 prices up to 33%

As anticipated, Apple Computer cut prices on some Power Macintosh G3 systems as much as 33 percent over the weekend, as vendors await even faster Power Macs by mid-month.

Of the three Power Macintosh G3 models that are still in production, the entry-level G3 with 233-MHz PowerPC 750 processor as well as the 266-MHz desktop system received price cuts of up to $300, as previously reported.

In early July, Apple stopped production on several other high-performance models, including the 300-MHz systems introduced in March. Those systems remaining in dealer inventory will see dramatic price drops as Apple prepares to fill out the high end of its lineup with new computers using 333- and 366-MHz PowerPC chips from Motorola and IBM.

Power Mac G3 pricing
Model	Previous price	Current price
233-MHz desktop	$1,699	$1,399
266-MHz desktop	$1,989	$1,699
266-MHz minitower	$2,499	$1,999
Source: Apple

For example, a G3 with 300-MHz PowerPC 750, 128MB of memory, dual 4GB hard disk drives, and a CD-ROM was reduced to $3,299 from $4,599, a reduction of approximately $1,300. A 300-MHz system with one drive and 64MB of memory had its price cut by $1,110 to $2,249, a reduction of 33 percent.

Some resellers said in late July that they might run out of G3 inventory (not including G3 portables or the iMac) before Apple refreshes its product lineup, an event that was expected to occur in early September but is now expected to occur on August 12, industry sources say.

Running short of systems may be better for Apple's profitability than having too many systems. That's because Apple would have to offer dealers money back on old systems sitting in inventory, and lower prices on the old systems can put a dent in sales of newer systems.

Dealers who spoke to CNET News.com are also pleased that Apple doesn't have to slash prices all the time now, because that causes customers to return to ask for money back.

The tight rein on inventory is a far cry from what observers call "the old Apple." One industry source said the company's one profitable quarter under former CEO Gilbert Amelio was "smoke and mirrors" achieved by shipping lots of computers to resellers, who then shipped unsold systems back to Apple.

Running out of systems during a product transition is not all that unusual within the PC industry. In May, many retailers selling Compaq Computer's Presario systems ran out of inventory as the company ramped up production of new systems for June, temporarily knocking the PC giant out of the No. 1 spot in retail sales.