Hardware News

Once-cool iMac loses its sheen

Ina Fried CNET News.com

Published: 05 Jul 2004 10:55 BST

It may have been "flat-out cool" -- as Time proclaimed on its 2002 arrival -- but "flat" had also begun to describe sales of the just-discontinued second-generation iMac.

The white, desk lamp-like iMac with its adjustable flat-panel screen debuted to both strong demand and critical acclaim, but sales quickly lost steam, leaving analysts unsurprised by Apple's plans for an all-new design. Apple stopped taking orders for the flat-panel iMac last Thursday.

"The old iMac wasn't selling so well, and it was getting long in the tooth," said retail analyst Stephen Baker, who tracks the computer market for the NPD Group.

Apple has declined to comment on the replacement iMac, but the company issued a statement last Thursday saying it had halted sales of the current model and would have a new one ready by September. Apple said it hoped to have the new model sooner but wouldn't say what led to the holdup.

The current iMac design debuted in January 2002, succeeding the translucent machine famous for its variety of gumdrop colours. The flat-panel landed on the cover of Time magazine just as chief executive Steve Jobs showed the machine off before thousands of Mac fans at Macworld Expo San Francisco. In less than a month, Apple boasted 150,000 pre-orders.

For a time, the unit was scarce on store shelves, and Apple chose to briefly hike the price by $100 (£55) to make up for rising component costs. By June of that year, there were already signs that demand was flattening out.

Combined iMac sales of $448m peaked in that first quarter and have steadily declined since.

"If you look at the history of this iMac, the one thing that has to strike you is the huge jump out of the starting line," Baker said. "Once it got going, I'm not sure it ever really caught on."

In the quarter that ended in March 2004, Apple sold 217,000 iMacs -- the lowest total ever and below the 233,000 units of the original iMac sold in the last quarter before the flat-panel model was introduced.

The flat-panel remained a pricey machine throughout its life. Unlike the original, which eventually entered the sub- $1,000 and sub- $800 ranks, all varieties of the flat-panel iMac sold for a suggested price of at least $1,200.