PARIS – Apple Computer Inc. (AAPL) on Tuesday introduced its new iMac (search), the latest version of the consumer desktop computer that restored the company's fortunes as a force in personal computing.
The new model, unveiled by Apple senior vice president Phil Schiller at the opening of the Apple Expo in Paris, upgrades the iMac line with the faster G5 processors already used in Apple's top-end Power Macs.
"It's a much faster architecture," said Schiller as he presented the new iMac, an all-in-one unit resembling a flat-panel monitor but with the processor and other components stashed behind the screen. CDs or DVDs load into the side of the two-inch-thick panel.
"A lot of people are going to be asking where did the computer go?" Schiller joked. "It's around here somewhere and I just can't find it."
The announcement ended days of fevered speculation about the launch, postponed from earlier this year because of inadequate supplies of the G5 processors made by IBM Corp.
Schiller said the iMac would begin shipping in mid-September. Priced at $1,299, the basic 17-inch model features a 1.6 gigahertz processor with 256 megabytes of memory and an 80 gigabyte hard drive.
The top-end model, with a 1.8 gigahertz chip, 20-inch screen and 160 gigabyte hard drive, will go on sale at $1,899. All models feature three USB and two Firewire ports and can be expanded up to 2 gigabytes of memory.
The first iMac model — a translucent, colorful all-in-one cathode-ray-tube design — sold 6 million units after its introduction in 1998, helping Apple draw a line under three years of losses.
Since then, Apple's iPod music player and iTunes music download site have also become runaway successes, but the company still makes about 60 percent of its revenue from computers.
The second iMac model, consisting of a flat-panel screen perched on a stylish steel arm and hemispherical base, made a big splash at its January 2002 launch.
But sales have been lackluster in the last year. Apple sold 217,000 in the January-March, the lowest total ever.
The promised new G5 iMac failed to materialize by June, and Apple has since exhausted its stocks of the existing model — missing out on the back-to-school shopping season.
The new iMac will underpin the next stage of the company's drive to remain a force in personal computing.
From a high of 9.6 percent in 1991, Apple has seen its PC market share slip steadily to 2.0 percent in 2003 before picking up slightly to 2.2 percent in April-June this year, according to figures compiled by global IT consultancy IDC.
Analysts say the popularity of the iPod and iTunes may have helped halt the decline of the Macintosh on the mainstream consumer marketplace, though both can also be used with Windows PCs.
The iMac's cool, minimalist aesthetic and expensive-looking finish is also a factor.
Whatever the basis of its appeal, analysts said the new iMac could only be a hit if the price is right. The $1,299 price tag announced Tuesday matches that of the first iMac six years ago, and undercuts the second model by $500.
"Everyone is willing to pay something for aesthetics in terms of a premium, but not more than a certain amount," he said.
The new iMac will also be crucial to Apple's attempts to keep its stronger footholds in markets such as education, where it is facing a stiff challenge from Dell.
Apple's share of education sales slid from 38 percent in 1995 to a low of 13.2 percent in 2002, before recovering by almost a full percentage point by April-June 2004.
Over the same period, Dell has seen its slice of the school and college market grow from about 2 percent to more than 45 percent, shipping 2.6 million units in 2003.
Some 70,000 people are expected to visit the 2004 Expo, the main annual showcase for Apple products in Europe, which closes Saturday.
Apple CEO Steve Jobs (search ) is recuperating at home after successful cancer surgery on his pancreas and was unable to attend the show.
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