Sales of Apple's professional desktop declined sharply in Apple's December-ending quarter, compared with the previous quarter. And Mac resellers say that the new flat-panel iMacs will start to eat into Power Mac sales unless Apple introduces new Power Macs soon.
Apple also needs to catch up to its outside competitors, analysts say. The Motorola G4 chips in Apple's Power Mac towers have been topped out at 867MHz since July, while Intel has continued to ratchet up its Pentium 4 chips to 2.2GHz.
There are a number of indications that Apple will introduce new Power Macs this quarter, perhaps as soon as next week, resellers and analysts say. An Apple representative declined to comment.
One reseller, who asked not to be identified, said Friday that Apple sales representatives indicated at the Macworld Expo in San Francisco earlier this month that new Power Macs would be coming by the end of January, or early February at the latest. That assertion appears to be supported by Apple's own recent moves.
In addition, the company has extended a holiday promotion that takes up to $500 off the purchase of a Power Mac and flat-panel monitor. But the deal was extended only until Jan. 31.
And several analysts who were on Apple's earnings conference call Wednesday said that implicit in Apple's guidance for the current quarter was an improvement in Power Mac sales, which almost certainly means faster machines are on the way.
"Apple's guidance suggests they believe they will have strong Power Mac sales. The only way you achieve that is to refresh the line," said Needham analyst Andrew Scott. The company's guidance for the current quarter includes sales of $1.5 billion, up from $1.38 billion in the company's December-ending quarter.
Although sales of the new iMac are undoubtedly one driving-force behind Apple's optimism for sales in the current quarter, the company also said it will take all quarter to build up production of the flat-panel machines and said it does not expect to be able to meet demand.
Meanwhile, Power Mac sales have been on the decline. Shipments of the G4 desktop fell to 212,000 units in the October-to-December quarter, compared with 248,000 in the prior quarter. Without a faster machine, analysts say, sales are expected to drop further. Apple has long been trying to make the case that performance is about more than just megahertz, but analysts say the widening gap poses both a marketing challenge and a real performance difference.
"Even (Advanced Micro Devices) is only lagging by about a 25 percent gap" behind Intel, said Nathan Brookwood, a chip analyst at Insight 64. AMD's fastest chip is the Athlon XP 2000+, which has a clock speed of 1.67 GHz.
Although gauging comparative performance is a tricky issue, Brookwood said that Apple appears to be losing ground--with the exception of programs that make heavy use of the G4's added instructions for multimedia tasks.
"For general-purpose computing," Brookwood said, "it's real tough to make up for a 2-to-1 clock-rate difference." Such computing doesn't use the multimedia instructions.
The Power Mac may be facing competition from Apple's new flat-panel iMac, which also uses the G4 chip at speeds that are nearly as fast as the ones used in the Power Mac.
Even though the new iMacs are not shipping yet, resellers say the announcement of the new machines is already affecting Power Mac sales.
"That's killing low-end Power Mac sales, and the high-end ones aren't doing (that much better)," said one reseller.
Although the Power Mac line in general is aimed at graphics designers and other creative professionals, a significant percentage of them are sold to consumers. On this week's earnings conference call, Apple Chief Financial Officer Fred Anderson speculated that between one-third and one-half of the low-end Power Mac sales are to consumers. And that low-end model accounts for about half of the units sold within the line as a whole.
Currently, the low-end Power Mac, which runs at 733MHz and includes a 40GB hard drive and 256MB of memory, sells for $1,699 without a monitor. By contrast, the new iMacs range in speed from 700MHz to 800MHz and sell for $1,299 to $1,799, including the built-in flat panel display. The iMac does lack the internal expansion slots and the Level 3 cache memory of the professional machines of Apple's high-end Power Mac but is significantly cheaper when one includes the cost of the display.
News.com's Joe Wilcox contributed to this report.