Tech Industry

Apple cuts prices on older models

Apple lops up to $1,000 off notebook and consumer desktop systems to shore up sales during its historically slow second quarter.

Apple Computer (AAPL) lopped up to $1,000 off notebook and consumer desktop systems in an effort to shore up sales during its historically slow second quarter.

Apple cut the price of a PowerBook 1400c/166 with 166-MHz PowerPC 603e processor and 11.3-inch active matrix display to $1,999, a reduction of 33 percent from $2,999. A model with dual-scan display is available now for $1,749.

The company also dropped the price of the PowerBook 2400c/180 sub-notebook with 180-MHz PowerPC 603e and 10.4-inch active matrix display, to $1,999 from $2,499.

Apple now has several notebooks priced under $2,000, a target that PC (Windows-Intel-based) notebook manufacturers believe will be a growing market segment for portables. (See related story) The price cuts could also help generate some sales momentum, helping to answer lingering questions of whether Apple is on a road to sustained profitability. Last quarter the company surprisingly announced a quarterly profit of $47 million.

Apple still lags in the market for consumer systems, however. Models in the Power Mac 6500 line, first introduced in April of last year, are just now hitting industry-average price points. The 6500/300 with 300-MHz PowerPC 603e is now priced at $2,299, a reduction of $700, and the 6500/250 is priced at $1,499, a reduction of $500. Meanwhile, the now-inexpensive PowerBook 1400 was first introduced in October 1996.

And even with the lower pricing of the fully configured older systems, Apple has yet to offer a system for the rapidly expanding sub-$1,000 market. Published reports estimate that some 40 percent of all new computer systems sold are priced less than $1,000.

Apple won't be targeting that portion of the low-margin consumer market in the near future. Apple historically has found that its March quarter is the weakest of the year, and company officials don't expect the company to post revenue growth.

Trying to generate sales, Apple also faces the task of selling its consumer systems through fewer retailers than before (see related story), although some analysts think the company could see its sales boosted by concentrating on one major national retailer, namely CompUSA.