Originally created 08/15/98

Apple Computer's futuristic new iMac goes on sale



SAN JOSE, Calif. -- Apple Computer Inc.'s latest machine is certainly eye-catching, but the challenge is to catch computer buyers.

With 150,000 advance orders and a $100 million advertising budget to keep up the momentum, Apple should be able to hold on to the faithful. But it remains to be seen whether first-time computer buyers will try the iMac over a Windows-based computer.

The iMac brings a lot of flash and performance, but questions remain whether that will be enough to lure new buyers or even win back Mac users who've strayed to other machines. The iMac has yet to address worries about available software and Apple's relevance with a 3 percent share of the computer market.

The iMac's rounded lines and translucent case are like no other computer, something Apple emphasizes in its sales pitch "to everyone who thinks computers are too complicated, too costly or too beige."

"It's just wildly different," Hal Gibson, executive director of the Berkeley Macintosh Users Group said of Apple's iMac. "And when Apple does that, something daring, that's very exciting."

iMac is the first computer Apple has made specifically for the home market in six years. With a $1,299 price tag, including a monitor, it has a better shot at competing with Windows-based machines. A computer built around Windows 98 can cost less than $1,000, but doesn't come with a monitor that costs at least $200.

Apple's chief marketer, Phil Schiller, said that in the first seven days it took orders earlier this month, retailers called for 150,000 machines. He said that was the largest number of advance the company ever had, beating the original Mac in 1984 and the Power PC line a decade later.

Retailers said consumers have been asking about iMac ever since its unveiling in early May -- and signing up for them.

"We've had more demand for the iMac than we have seen for any computer in (our) history," said Jeff Walker, vice president of retail sales for ComputerWare, a 13-year-old Macintosh-only chain based in Silicon Valley. "It's just phenomenal."

Despite the expected success of iMac, several questions remain. Some would-be buyers may balk at its lack of a floppy drive and absence of familiar connections for a printer or other devices.

But Apple is vigorously wooing first-time computer buyers by highlighting iMac's speed, simplicity and Internet capabilities -- the "i" in iMac.

The company also hopes iMac will entice back some of the former Macintosh users who defected to rival computers using Intel Corp. chips and Windows software.

But once Mac users have made the switch to Windows, they need a compelling reason to return, said Rob Enderle, an analyst with Giga Information Group in Santa Clara, Calif.

"The iMac is a reason to move back, but it doesn't solve the problems that made people switch in the first place," he said.

Doubts about software availability make it difficult for customers to pony up the money for a Mac when a Windows-based machine is often cheaper. And with about 3 percent of the computer market, the Mac is simply seen as a fringe product by many shoppers.

Doubts about Apple's survival in recent years further cut into its standing among computer buyers. Hot sales of the iMac could be Apple's best shot at regaining respectability with consumers.

The company claims that iMac's 233-megahertz microprocessor outperforms rivals' high-end PCs with a 400-Mhz Pentium II chip from Intel.

But iMac lacks an internal floppy-disk drive, which allows users to copy data on inexpensive 3.5-inch diskettes. Schiller said -- and some Mac users agree -- that people don't use floppies as often as they once did, instead storing files on external drives and exchanging data over networks. Users will be able to add external floppy drives.

The new machine also doesn't have standard ports for peripherals, relying instead on new, Universal Serial Bus connections that promise to make adding printers, joysticks and other devices easier. USB is expected to become the new standard, but few USB peripherals or adapter devices are available yet.

But Apple's betting the typical iMac user wouldn't care much about those features.

"The people who are going to use (iMac) are just going to plug them in," run simple programs and surf the Internet, Gibson said.