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Apple set to cut iMac prices year on year, claims Jobs

Apple targetting the $500-$800 market

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Apple interim CEO Steve Jobs explained the company's pricing strategy when he gave the keynote at the US Cause 98 education-in-IT conference. "Our goal is to drive [prices] lower and lower every year," said Jobs. His goal is to bring prices down to around $100 above what he called "white box" companies -- no name cloners offering "piece of Junk" (according to the great man) for as little as $800. Assuming all this happens, it marks an interesting shift for Apple. Its pricing policy for a given market segment has, by and large, always been to cut the price of the current model, introduce a faster version at a higher price, then phase out the old machine and simultaneously drop the better-specced Mac down to the original price point. Essentially, this maintains the same price point, either directly or as an average of the lower priced old machine and higher priced new model. However, with no Motorola PowerPC Celeron in the works, or compatible cut-price processors from rival manufacturers, if Jobs is to compete in that space, he has to keep cutting the price of, say, 233MHz iMacs while keeping a 'high-end' version based on the latest CPU at the $1299 (or £999, over here in the UK) price point. It will have to be a fairly dynamic process to ensure Apple doesn't end up with a long line of 233MHz, 266 MHz, 300 MHz, 333MHz and up iMacs which will ultimately just confuse the punters (even vendors of Wintel boxes don't like doing that any longer). But if Apple cuts the current iMac to $900 in the new year (paving the way for a new, 300MHz machine at $1299), it should be ready to target the $599 market the following year. ®

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