U.S. News

Apple Launches Slimmed Down, Redesigned iMac


Apple unveiled a line of slimmer desktop computers on Tuesday in a long-expected update of its iMac brand, positioning it for the back-to-school and holiday shopping seasons.

The new iMacs, which will sport thinner aluminum casings, have displays measuring 20 inches and 24 inches and will cost $1,199 to $1,799, depending on their configurations, said Apple Chief Executive Steve Jobs at a media event at Apple's headquarters in Cupertino, California.

The cost of the 24-inch iMac has been dropped by $200, and Apple has eliminated the 17-inch iMac computer, Jobs said.

The last update to the iMac line was in September 2006, when Apple introduced a model with a 24-inch screen -- its largest -- and said the entire model line would be powered by Intel chips instead of ones from IBM.

"Apple has grown two to three times the market for the past several quarters," said analyst Shannon Cross of Cross Research. "This product launch should position them well for the back-to-school and holiday seasons."

Apple recently launched the iPhone mobile device in a bid to build a third major product line alongside its Macintosh computers and iPod media players, but desktop and laptop sales still account for the bulk of its revenue.

In its third quarter, Apple sold 634,000 desktops for revenue of $956 million, accounting for about 18% of total revenue.

"The iMac has been really successful for us and we'd like to make it even better," Jobs said. "We've managed to make it even thinner than before."

Apple laptop sales totaled $1.58 billion in its most recently reported quarter. The MacBook laptop line was not affected by Tuesday's announcement.

Sales of Macintosh computers have grown faster than the overall PC market, but Apple's share of the market by unit sales is estimated to be less than 5%.

Apple has also used the iPod and, now, the iPhone as "halo" products to draw customers into stores and get them interested in its computers.

Jobs also said that the company was adding a software "button" to the iPhone that allows users to upload photos taken with the built-in camera on the iPhone to Apple's .Mac online data and Web-hosting service.

Apple shares have gained 59% so far this year, largely on anticipation of strong demand for the iPhone and that enthusiasm for the device will translate into stronger sales of other Apple products.