iMac Zooms as Best-Selling Computer in November

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As Apple Computer Inc. showcases new products and celebrates its regained profitability at the Macworld Expo in San Francisco, recent data indicate its iMac computer was the top-selling PC in November at both U.S. retail stores and through mail order.

According to market research firm PC Data Inc., Reston, VA, combined mail and retail sales of the iMac accounted for 7.1 percent of all unit sales and 8.2 percent of total PC retail revenue in the United States. The Cupertino, CA, company, which sells largely to consumers and small businesses, has been injected with new life by the sleek, small iMac, said Stephen Baker, senior research analyst at PC Data.

"There's a big portion of the market that they have a very small market share in," Baker said, alluding to large, corporate customers, who account for 80 percent of the overall PC market. "That's a problem going forward, but I think in terms of reinvigorating themselves, the iMac's been a great product."

Apple CEO Steve Jobs said the company will announce its fifth consecutive profitable quarter this week -- an impressive turnaround for a company widely expected to slide into oblivion only a couple years ago. Apple further said it has sold 800,000 iMacs since the computer's introduction in August and unveiled a new iMac that is available in self-described colors strawberry, lime, blueberry, tangerine and grape. The new iMacs use a faster 266 MHz PowerPC G3 processor, a 6GB hard drive and carry a price of $1,199.

The iMac's rankings steadily improved as 1998 wound down, moving from the fourth best-selling computer in August to third-best in September and second in October. By November, it led in combined retail and mail-order sales, followed by Compaq Computer Corp.'s Presario 5150 and Hewlett-Packard Co.'s Pavilion 6355.

As a result, Apple's overall market share increased from 5 percent to about 10 percent. But Apple continues to trail the four top PC original equipment manufacturers -- Compaq, which recently announced plans to more aggressively sell its PCs through direct channels; Packard Bell-NEC; Hewlett-Packard; and IBM Corp.

About half of Apple's sales take place through mail order, according to PC Data's research, though it made up the majority of sales as the holiday season set in. Comparative sales figures for December aren't yet available. Most of the big PC direct marketing companies -- including PC Connection Inc., Micro Warehouse Inc., Multiple Zones International Inc. and CDW Computer Centers Inc. -- have long histories with Apple.

Baker dismissed the notion that the holiday season was the driving force behind the sales spike in the iMac, saying Apple's aggressive promotion of the computer was more responsible for the boost. Some retailers threw in printers, extra memory or other peripherals with iMac purchases.

But PC Data projects that Apple's new star will slip from the top of the final sales tally for December, because of price competition from other PCs. The average selling price of an iMac was $1,226 in November, though at least one retailer slashed its price to less than $1,100.

Revived for now, Apple likely will find itself greatly challenged by what lies ahead, as PC pundits suggest the company must reach out to corporate buyers it is to gain on the established industry leaders.

"[Apple has] strong channels and loyal customers," Baker said. "This is a great product and it's doing very well. It's only targeted at a small portion of the market, however, and for them to be considered 'back,' I think they need to adjust their focus to the corporate market as well."

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