Just how good are iMac sales?

Summary:So, was I wrong? It wouldn't be the first time, now would it?

So, was I wrong? It wouldn't be the first time, now would it? Last week, I noted that CompUSA and other retailers were reporting a significant slowdown in iMac sales. The slowdown was such that the predictions of nearly a million iMacs being sold by Christmas were now in serious jeopardy.

As a response to this sales slowdown and as a way to jumpstart further iMac sales, Apple revised the iMac (rev. B) with more video RAM (6MB), Mac OS 8.5, and an improved USB driver. And Apple has instituted a Loan to Own program that sets iMac customers back a whopping $29.95 per month. No ups, no extras. Nice deal.

This week, CompUSA reports that iMac sales are again hitting new records. According to CompUSA, "iMac sales for the second time since the product's retail rollout on August 15 [are at an all-time high]. Last weekend's iMacs sales were the largest since the product's initial launch in August, making iMac the best selling personal computer in CompUSA's history."

Further, CompUSA says the sales gains are with exactly those kinds of customers that Apple has been hot to sell to for years. "We're seeing iMac continue to gain momentum with first-time users and families who want to explore the Internet," said Jim Halpin, CompUSA president and chief executive officer. "Our customers are telling us iMac is stylish, easy to use, and since customers can now get it for $29.99 a month, iMac is a great holiday value."

And the news is good across the country, even where CompUSA does not have stores. "Across the nation, iMac was the No. 1 selling desktop model in PC superstores in August and September with 12.3 percent and 9.8 percent channel sales respectively," according to Matt Sargent, industry analyst at ZD Market Intelligence, a leading industry research firm that tracks technology distribution channels.

The official story
So, what is really going on with iMac sales? Were they down and now they are up? Were they never down? Or is the whole up-down-up cycle just a PR stunt?

Here's what a senior marketing manager at CompUSA told me this morning: "iMac sales did drop, Don. No question about it. And we were concerned, because a lot of us thought the initial run rate would flow right through Christmas. So, we weren't crying wolf on this one."

But the new $29.95 per month loan deal and improvements to the machine couldn't be responsible for this turnaround so quickly, could they?

"No, the turnaround in sales actually started before the downturn ever got leaked to the press," this same manager told me. "We think the second wave of TV ads, plus our own newspaper campaign has helped fuel this, and the new Apple incentives will drive it right through the holidays."

And CompUSA, now that competitor Best Buy is selling iMacs (poorly, perhaps, but they do sell them), intends to keep up the sales pressure by offering goodies like free USB peripherals and software packs.

Future iMac sales
Much has been leaked from inside Apple about future iMac configurations that would help continue the sales momentum for this consumer computer. Whether any of these souped-up machines ever see a store shelf is not clear, but what is clear is this: Apple, for the first time in a very, very long time, is actually paying attention to customer feedback and to its retail partners feedback -- which is exactly why we have the $29.99 deal and the iMac rev. B.

Given all that, expect to see price cuts in the iMac along with further hardware and software bundle improvements, as well as innovative bundling deals like those CompUSA offers that included a printer and scanner at dirt-cheap prices. With the price target on good, but inexpensive home computers continuing to drop on the Wintel side, Apple really doesn't have a choice, does it?

Topics: Apple, Hardware

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