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Apple targets low-income families as iMac sales decline

Mac maker offers hire purchase scheme. Look out, Radio Rentals, we say...

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Apple has announced a scheme to provide financing for would-be iMac owners with the aim of attracting the many US families who would like to own a computer but can't afford to buy one straight out. The move appears well timed -- market research suggests demand for the consumer Mac is waning. According to ZD Market Intelligence (ZDMI), US iMac sales in September were 50 per cent down on those recorded in August, the month in which the machine was launched. Last month sales slipped even further. The data was compiled from interviews with Apple resellers. Of course, this should come as no surprise given the huge promotional campaign Apple ran for the launch, a campaign that has long since wound down. Equally, initial demand for the machine was way ahead of what you might expect for a new PC -- so if you start above average, its not hard to predict that you might end up below average some way down the line. ZDMI analyst Aaron Goldberg complained about the iMac's price, lack of floppy drive and relative paucity of software, but these are old arguments, largely proved redundant by the machine's overall success to date. The question really is whether the machine will ultimately win support outside of Apple's traditional user base. As Dataquest analyst Scott Miller has compared iMac buyers to VW Beetle buffs: "It's like those peope who ran out and bought the first Beetles. At some point you run through those buyers and you have to get that next generation of user." This is where the finance plan comes in. The deal allows buyers to take away in iMac for a $29.99-a-month payment over a total of 67 months -- over five and a half years -- which sounds a lot but isn't the far beyond the lifespan of most home machines. And Apple is specifically aiming for lower income homes -- "our programme is targeted to people earning down to $15,000 a year," said interim CEO Steve Jobs -- who are even less likely to upgrade quickly. The only snag is the increasing availability of PCs as cheap as $599, so Apple will have some persuading to do. However, its ad spend over the holiday season will be significant, according to CFO Fred Anderson, so it will be interesting to see if price or profile wins out in the end. ® Click for more stories Click for story index

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