Apple's iMac--What Next?

Did Apple just do what Steve Jobs, according to various books on the Apple CEO, is absolutely paranoid about? Apple just announced a new model of the iMac at least two months ahead of it being available in September. The story is that Steve Jobs learned not to annouce new products until they were ready to go from the Osborne Computer experience in the early days of personal computers. After Osborne announced that a newer-faster-better model was in the works, sales of the current model tanked as most people waited for the new model depriving Osborne Computer of the cash it needed to stay in business to produce the new model.

The answer depends on how one interprets the situation but we would say not. Why? Because Apple has frequently been slow by several months to deliver at least some models in a line of newly-announced Macs, Apple is not presently financially dependent on just the iMac, Apple has a huge cash reserve approaching $5 billion and Apple has not divulged any details about the new iMac to cause people to stop buying what's already in the retail channel. It's simply an announcement of the fact that one can no longer order an iMac from the online Apple Store until at least September.

On the other hand, is this a big screw up as some media pundits have alleged, one that will cost Apple tons of money in lost sales that will be impossible to make up? We say not. Current iMacs remain in the retail channel so, perhaps, Apple has decided to dispose of the remaining stock via its retail partners rather than in direct competition via its online store. Sales of the current iMac model have slipped to their nadir and perhaps the partner retail channel can handle all the sales that there would be in two months anyway--a nice bone to them as well as making sure they are not stuck with lots of the older model when the newer one comes out. Perhaps Apple has also learned from its supply problems with the initial introduction of the current iMac and the iPod Mini that it loses a greater ton of money by not having a sufficient supply of consumer products available to meet the initial demand. The Apple Store announcement is consistent with this, a nice bit of self-deprecation and the drop of a small tantalzing morsel for the future and more detailed announcement. Of course, we are just speculating like the nay-sayers. Only Apple executives know for sure.

What about the new iMacs? No one knows anything outside of Apple's top inner circle so we won't pretend that we do. We do think that Apple needs to forge some new ground with the new iMac in order to get it's consumer desktop's sales roaring again. A new case design with some speed and storage capacity bumps may produce a good seller but probably not a stellar one.

What are some of the areas that could be forged? In our opinion, there are at least three possibilities. The first is to put a single, lower powered G5 in it. Then Apple's consumer desktop would have speed bragging rights over the offerings from the Wintel crowd in its price range. The second is make it into a tiny screenless case, not much bigger than a SuperDrive. This rendition would probably have to retain a G4 up to 1.5 GHz but it seems feasible given how small the 12" PowerBook and iBook are. If Apple started it at around $500 or so, sales would be hot. But would they be hot enough? Apple has learned with the iPod that it can make a ton of money off items selling for substatially less than $1000 if it has a hit. Is now the time for Apple to take the risk with a computer? We think the time couldn't be better, especially if it were coupled with a similarly designed 17" flat panel screen for around another $500. The third is to explicitly exploit the digital music movement in some new and imaginative ways beyond our ability to fathom--we could only come up with an integrated iPod dock.

What do you think?