US Report: iMac sales a third quarter homer for Apple

If there was any doubt that the iMac is a smash success for Apple Computer Inc., let all doubters eat crow. A Bondi Blue crow.
Written by Sean Silverthorne, Contributor

According to International Data Corp, the iMac launch has been enormously successful, and helped Apple post the highest growth rate of all computer makers in the third quarter.

The company will sell between 600,000 and 900,000 units this year, enough to vault the company from eighth place in worldwide market share to fifth, perhaps supplanting Packard Bell, said IDC analyst Roger Kay. "I think it will be one of the all-time best selling single models," said Kay -- enough to fatten the company's top and bottom lines, and re-establish its reputation for innovation. That's the good news. The bad news is that Apple will at most have a three-quarter run with the translucent turquoise-and-ice-coloured iMac, priced at $1,299 (£792), at which point it will have to come up with a replacement model. "The box has some shortcomings," said Kay "It's not enough to essentially change Apple's position in the industry."

That said, most analysts seem in agreement that the iMac is a home run that keeps the company in a game it was in serious danger of losing. "It has been absolutely beyond our wildest dreams," said Paul Ramirez, vice president of marketing at ComputerWare, a chain of 10 Mac-only shops in Northern California. The company will be releasing iMac sales information shortly, Ramirez said

Although Apple does not release numbers, there is anecdotal evidence that the iMac is huge: Analysts have estimated the company will sell as many as 800,000 this year, and privately some Apple executives are predicting a 1 million unit year. That would make it the most successful consumer computer launch since Apple rolled out its Power PC line four years ago. According to CEO Steve Jobs, Apple sold out the iMac stock machines in Japan through the end of September.

Apple took 150,000 pre-orders before the August 15 launch.

In contrast to earlier years, Apple made enough of the machines to keep the pipeline full. The company has a history under estimating demand for red-hot products such as the PowerBook portable, causing customers to wait months to buy a computer. Apple strengthened up manufacturing operations in Sacramento, Singapore and Cork, Ireland. And users seem enthralled. "The iMac is a wonderful machine," wrote Eric Jungemann, in a ZDNet TalkBack. "My wife has never used the Internet and e-mail and was up and running right away."

But Apple has also paid dearly to get such loyalty. It has embarked on a $100m (£61m) campaign to convince consumers, especially those with little or no Internet experience, to jump on the Web bandwagon with an iMac. But the big question now is this: Are the iMacs best days over? The company has had difficulty in the past with sustaining demand for some products after the initial burst of enthusiasm.

The iMac could prove particularly susceptible because of some of its technological risk taking, beginning with the lack of a floppy drive. "Technologically, the iMac is in advance of the market," said analyst Kay. "It is expecting cable modems and USB (Universal Serial Bus peripherals) that aren't there.

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