Apple may cut original iMac shipments

Is the market big enough for two models of iMac? Apple may not think so, as a report suggests it may be stopping shipments of 15-inch models in the autumn

Apple may be preparing to shut down production of its original flat-panel iMac computer in October, as it grapples with high inventory levels and prepares to ramp up production of the higher-end 17-inch models.

Shipments of the 15-inch model will end in October, according to a report in Taiwanese high-tech industry journal DigiTimes, which cited PC makers in the area.

The news could end the roller coaster saga of the flat-panel iMac, whose fortunes have closely tracked those of the volatile flat-panel display market. Apple was first forced to raise prices on the machine when high demand for LCD displays and slow production boosted the components' prices, but later found itself with inventory on its hands as demand trailed off. The iMac's price was recently cut back to its original levels.

In the UK, prices were cut even more steeply than the US early in August, due to the falling value of the US dollar. The low-end model now sells for £1,149 -- a £100 price cut. The mid-range version, which comes with a combination drive that can burn CDs and play DVD movies, now sells for £1,349, a £50 price cut.

Production of the 15-inch models flowing out of Taiwan has already shrunk to 20,000 units, according to the report.

Meanwhile, in order to enable Apple to cut prices further, the company has been pressuring suppliers to lower their costs for the 17-inch model. Quanta Computer, which assembles the machines, has moved all its production to China in order to keep prices down, DigiTimes said.

Other contractors in Taiwan include Hon Hai Precision Industry, which trades under the name Foxconn Electronics and makes the screen's pivoting arm, and Catcher Technology, which makes the iMac's hemispherical base.

An Apple representative said the company would not comment on its future plans.


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