Flat-panel iMacs on the way?
Morgan Stanley analysts Gillian Munson and Stirling Levy said in the report that Apple has placed component orders for producing 100,000 15-inch flat-panel iMacs per month, starting in January.
The all-in-one computer virtually revived Apple when it emerged in 1998, but sales have steadily declined in the past year and a half.
"Supply contacts indicate that an all-in-one flat panel iMac might be announced" in early 2002, Munson and Levy said in the report. "As usual, specific product details are shrouded in secrecy."
An Apple representative declined to comment.
A flat-panel iMac has been anticipated for some time. However, predictions of its arrival have so far proved premature.
But with flat-panel prices continuing to drop and the 3-year-old iMac graying, analysts say now is the time for a new machine. Although Apple has changed the processor, features and colors of the iMac several times since its introduction, the basic design has remained the same since the beginning.
Munson and Levy said they "suspect" that Apple CEO Steve Jobs will announce the flat-panel product at Macworld Expo in San Francisco in early January. The twice-yearly trade show is Apple's typical venue for introducing new computers.
David Bailey, who covers Apple for brokerage Gerard Klauer Mattison, predicts that Apple will introduce a new iMac at some point in 2002.
"We expect next year to be the year of the desktop for Apple," Bailey said. "This year they revamped their portable line."
The Morgan Stanley report predicts that production of the flat-panel iMac could reach 500,000 units or more next year.
Sales of the iMac have been dropping in the past year and a half as the machine has had little design change and only modest improvements in performance. In Apple's fiscal fourth quarter, which ended in September, the company shipped 294,000 iMacs, down from 571,000 machines in the same period last year.
Apple last updated the iMac in July, adding faster processors and offering more subdued colors. In February, the company added rewritable CD drives and introduced flamboyant hues such as the polka-dotted Blue Dalmatian and tie-dyed Flower Power. Those two patterns have since faded out.
In the past several months, the company has relied heavily on promotions to bolster sales of the machine. One current deal offers a $150 rebate or free digital camera with the purchase of most iMacs.
Although Apple's financial results and stock price are often driven by new product introductions, the Morgan Stanley report notes that Apple may not get the same boost it got from the original iMac, which drove sales and dramatically improved profit margins.
"Therefore, Apple needs even more of a design home run this time," Munson and Levy said in the report.