Apple Cuts Prices, Updates Desktop Macs

As rumored, Apple yesterday refreshed its entire desktop product lineup, ranging from the tiny, $599 Mac Mini to the powerful, $2,499 Mac Pro tower.

The changes include new specs and lower pricing on the company’s iMac family, an expansion to its Mac Mini low-end line, and tweaks to the Mac Pro, a Xeon-based workstation, which makes the jump to Intel’s new Core i7 (“Nehalem”) technology.

Even better, Apple said it would be trimming the prices on most models by a few hundred dollars.

The updates validate the rumors circulating on Monday, and match Apple’s recent refreshes to the MacBook line in that they feature new internals, an nVidia graphics processor and environmentally friendly components.

The moves also come as a sign that Apple remains willing to press ahead with its regular PC updates — despite the current malaise gripping much of the industry. Yet the price reductions signal that even Apple, long unwilling to undertake the deep pricing cuts in line with many of its competitors — isn’t willing to wholly ignore the economic environment.

Apple’s refreshed lineup includes its 20-inch iMac, which comes with a 2.66GHz Intel Core 2 Duo processor, 2GB of RAM, 320GB of hard disk storage and the nVidia GeForce 9400M graphics processor as found in the MacBook/MacBook Pro line introduced late last year. The unit also had its price cut by $300 to $1,199.

Meanwhile, Apple’s flagship, 24-inch iMac model has been trimmed $300 to $1,499 for a basic configuration. However, it’s now available in two higher-end models as well.

The $1,499 version features a 2.66 GHz Intel Core 2 Duo processor, 4GB of memory, 640GB of storage and the nVidia 9400M processor. For $1,799, you get a 2.93GHz processor, 4GB of memory, a 640GB hard drive and nVidia’s GeForce GT 120 processor with 256MB of dedicated memory. The GT 120 is a faster chip than the 9400M with dedicated graphics memory.

The $2,199 iMac comes with a 3.06GHz Core 2 Duo processor, 4GB RAM expandable to 8GB, a 1TB hard disk and a GeForce GT 130 video card with 512MB GDDR3 graphics memory.

Mini and Max

The long-neglected Mac Mini, which hasn’t been updated in almost two years, got a big boost in technology — as well as being split into two models.

The new model introduced at the existing $599 price point features a 2GHz Core 2 Duo processor, 1GB of memory with room for up to 4GB, a 120GB hard disk and the GeForce 9400M processor. For $799, you get 2GB of RAM instead of 1GB and a 320GB hard drive instead of 120GB.

When idle, the Mac Mini uses just 13 watts of power. The case has been redesigned to feature five USB 2.0 ports. The Combo Drive has been replaced with the dual-layer 8x SuperDrive, thereby supporting more formats. The FireWire 400 port was replaced with a FireWire 800 port and a Mini DisplayPort was added to support Apple’s new monitors.

The Challenge: Selling the New Macs

On the top end of things, the Mac Pro has gotten an upgrade and price cut. Like the iMacs, it had $300 shaved off its starting price of $2,799, but internally it’s had some big changes.

The machines, which run two quad-core Xeon processors, have migrated to Intel’s Core i7. Preliminary benchmarks show that processor to be more than twice as fast as the previous generation of Xeons.

The new Nehalem architecture supports three channels of DDR3 error correcting memory, which offer up to 2.4 times the memory bandwidth of older systems while cutting memory latency up to 40 percent. Mac Pros come with the GeForce GT 120 with 512MB of GDDR3 memory or, in a first for AMD, users have the option of a ATI Radeon HD 4870 card instead.

The Mac Pro includes four direct-attach cable-free hard drive carriers for installing up to 4TB of internal storage when using a 1TB Serial ATA drive.

All of Apple’s new computers feature the same environmentally-friendly components and designs as the MacBooks introduced last year. They exceed current Energy Star 4.0 requirements and meet Energy Star 5.0 requirements, which will become effective later this year. They use no polluting materials, like polyvinyl chloride (PVC) or brominated flame retardants and meet the requirements for EPEAT Gold status.

Apple has long been a premium product sold to a well-heeled customer base willing to pay extra for its product. That may be changing. NPD Group reported that in January, desktop sales fell 19.4 percent from January 2008 in terms of revenue and 10.9 percent in units.

Apple desktops fell at three times that rate, but there may be an explanation. New MacBooks came out in the fourth quarter and laptops account for an increasing percentage of Apple sales. Plus, the first rumors of dwindling iMac inventories began to hit the thriving Apple blogosphere, which hinted at new product to come. So customers may have held off buying.

Apple did not return calls seeking comment.

Still, 2009 is not looking rosy. Gartner expects PC sales to drop 11.9 percent in 2009, and that’s with mobile sales going up by nine percent. It all points to a collapse in desktop computer sales.

So can Apple sell these desktops? Yes, this is Apple, after all, noted Mika Kitagawa, principal analyst in Gartner’s client computing group. “I could imagine Apple’s growth will be the same or above the worldwide average,” she told

“They still have a broad loyalty and there will be people who will spend extra anyway, but it won’t be as strong as they were before. The good news is Apple is adjusting the price as much as they could. The 24-inch iMac at $1,499 is a pretty good price for their standard system,” Kitagawa added.

No PC vendor introduces product on the line between the first and second quarters, traditionally the slowest time of year, but Apple is positioning for a different market. “Their main customers are consumers and education, and their education business is suffering big time,” Kitagawa said. “Education typically starts buying in second and third quarters. I believe they are not looking at the consumer market, they are looking at the education market.”

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