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http://www.insanely-great.com/news.php?id=569
>From to famine to feast
By ron carlson, Insanely Great Mac
June 26th 2002
News.com reports that stock of Apple''s new LCD iMac is stacking up
The other shoe has dropped. In the span of about six weeks Apple''s new flat-panel
iMac has gone from shortage to surplus. News.com''s Ian Fried reports that uber
distributor Ingram Micro currently has 15 weeks of inventory on hand.
When the Luxo Jr. first became available, Apple couldn''t meet demand for the
flat-panel iMac. Now the world appears to be awash with the handsome desktops.
According to News.com, "[Ingram] sold 72 to dealers last week but on average has been
selling 87 a week. Since the beginning of the quarter, the distributor has sold nearly
5,000 of the high-end models and 3,900 of the other two models combined."
Not alone
Fried reports that other makers are facing difficult times as well. April was one of
the worst months for computers in recent years, with sales down 22.5 percent in the US
alone.
With plenty of stock on hand heading into the traditionally summer time frame, Apple
may be facing a difficult situation -- machines that apparently no one wants as it
prepares to rev the product line. Many sources around the Mac web claim Apple will
bump the speed of its iMac to 1GHz for the high-end model.
Moreover, Apple also has been discreetly cutting PowerMac prices. A quick glance at
any of the Mac-specific deal sites reveals a plethora of affordably priced pro
desktops often for $300 or more off the list price even before Apple''s abundant
rebates are applied.
One analyst quoted by Fried states that the desktop market continues to be flat and
that those still buying have switched to portable models, which often sell for the
same price as an entry-level iMac -- $1,399.
Price cuts?
Previously, a number of pundits stated that Apple is loathe to cut prices even as
component costs have come down (especially RAM) in recent weeks. Given the inventory
glut and slow economy it''s likely Cupertino will have little choice but to slash
prices to move units.
With its largest promotion in recent years under way as well as Steve Jobs avowed goal
of doubling the company''s market share, Apple needs above all to move units
regardless of profit. At this point, I''ll posit that volume and gross revenues should
be the company''s overriding goal.
The fat hasn''t yet hit the fire, but the company needs to move quickly to drive
sales. By this I mean not rebates, but genuine price cuts.
With new models on deck and stock building, what choice does the company have?
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