Tech Industry

Apple details new iMacs, OS 9

Apple shows off its new iMacs, featuring faster chips, a bigger hard drive, and better graphics.

CUPERTINO, California--Apple today unveiled three new iMac computers and demonstrated additional features in its Mac OS 9 software at an event here.

The new iMacs feature more powerful chips, more memory, bigger hard drives, and souped-up graphics chips, said interim chief executive Steve Jobs.

The basic version, featuring a 350-MHz G3 chip, will sell for $999. Jobs also announced a $400 rebate deal with CompuServe, meaning a new iMac can be purchased for $599 if a customer signs up for three years of Net access with CompuServe.

Jobs also touted a new, higher-end iMac, called the iMac DV. It features a DVD-ROM drive, 400-MHz G3 chip, and new iMovie software for creating movies on the desktop. It will sell for $1,299, Jobs said. An offshoot of this version is the iMac DV Special Edition, which features more memory and a larger hard drive for $1,499.

But will offering so many different types of iMacs and other systems confuse the buyer? One analyst said Apple has learned from the past and doesn't appear to be making that mistake again.

Prior to 1997, Apple's strategy was confusing, with too many different models on the market, said Daniel Kunstler, computer analyst with J.P. Morgan Securities.

The problem before 1997 "was poor marketing," he said. "The strategy then was about a whole lot of model numbers you threw up on a wall to see if they would stick. It was completely confusing."

Currently, Apple has four families of products, and it's clear where they fit, Kunstler said. Having several configurations of iMac may be diverging a little bit from their strategy, he said, but it doesn't signal a change in focus.

Other analysts reacted to Apple's renewed focus from the Microprocessor Forum in San Jose, California.

"Steve Jobs, as irritating a figure as he might be, has single handedly rescued the company from the abyss," said Keith Diefendorff, publisher of the Microprocessor Report. Diefendorff is a former employee of Apple, where he served as director of microprocessor architecture.

Referring to the original iMac, Jobs said, "This product has turned the industry upside down. It's been a landmark product, not just for Apple but for the whole industry."

Apple executives spent the first part of today's event detailing OS 9 changes. One new feature they focused on is the "key chain" function of the software, which acts as a master password and sets in motion all other passwords for accessing corporate networks, applications, and the Internet.

Mac OS 9 will be priced at $99 and will be available on October 23, Jobs said.

The new iMac and OS 9 demonstrations drew hearty applause from the Apple faithful at the Flint Center, an arena that has seen the launch of some of Apple's biggest products over the years.

Some supply concerns
The new iMacs come at a time when two other recently introduced Apple products are in short supply, say various resellers contacted by CNET The iBook notebook computer, introduced in July, was shipped to customers in September--as Apple promised--but only in limited quantities.

Until now, Apple had eschewed offering different configurations of the iMac, because the company wanted to remove the problem of managing parts inventory for different models. Apple can afford to target a broader portion of the consumer market while still managing production of five different colors.

After the launch of the original iMac, "We got a lot of feedback that one model probably couldn't serve everybody," said Jobs. "It's a way, I think, to give people more choice."

"A lot of folks wanted the lowest price possible, but a lot of other folks wanted advanced features." As an example, Jobs said he expected that the desktop video editing software Apple developed for the new iMac would be a popular feature on the more expensive new models because the whole process of editing home movies has been simplified.

In the case of the new top-line Special Edition model, a change of color alone may be enough to help Apple's sales in different directions.

"We had some people saying we love the colors, I've got one in the home, but I want to put one (iMac) in the office." The graphite-colored model will extend the iMac's appeal to the office environment, as well as power users, Jobs said.

Also, the high-end Power Mac G4 systems, especially those with the fastest chips, have been delayed and have only recently started to trickle into customers' hands. Those delays will cause Apple to post lower earnings for the fourth fiscal quarter of 1999 than had been anticipated, the company has said.

Apple will report earnings on October 13. Consensus analysts' estimates of earnings are now at 45 cents per share, according to First Call.

Apple's stock has rebounded from last week's slide. The stock closed today at 67.94, up 3.38. It was trading as high as 79.06 in September until news of product shortages tempered enthusiasm for the stock.

Apple has lost some of its luster as a result of the product availability issues, but analysts have not expressed concern that the issues will last into the next quarter.

Jim Davis reported from Cupertino and Tom Dunlap from San Francisco.