Apple Announces iMac Price Hike

TOKYO -- Hit by rising prices of some computer components, Apple Computer has decided to raise the price of its new iMac line of computers by $100, the company said Thursday.

The announcement, which was made by Steve Jobs, Apple's chief executive officer, during his keynote address to MacWorld Expo in Tokyo, came as Apple announced an updated version of its iPod music player, took the wraps off a 23-inch LCD monitor, and announced upcoming Bluetooth support for Mac OS X.

Citing a three-fold increase in the cost for memory and a 25 percent rise in the price of LCD monitors, Jobs said Apple will raise the prices for all three models of its new iMac computer. Effective immediately, the price of the 700-MHz G4-based iMac with CD-RW drive will be increased to $1,399, the 700-MHz G4-based iMac with Combo drive will rise to $1,599, and the 800-MHz G4-based iMac with SuperDrive will be priced at $1,899.

Calling the price rises "the last thing we wanted to do," Jobs said he hopes the price rises will be temporary. "But we are not sure how long the price trend will last."

Thanks for the Memory

Memory chip prices have been rising from all-time lows since late last year. The spot price of 256MB of dynamic RAM is currently around $65 per stick, according to data from memory market watchers ICIS-LOR. Six months ago, the same piece of memory was selling on the spot market for around $22.

Component price rises are affecting the entire PC industry, and Sony announced earlier this week a new version of its popular new Vaio W desktop and a $152 price rise, which it blamed on the same hike in component prices.

While the increase in prices takes immediate effect, the company will meet existing reseller orders and Apple online store orders at the original pricing, Jobs said.

The announcement of the increase in prices comes as Apple said production of the new iMac has reached the point where the company can begin clearing a backlog in demand for the funky, lamp-like computer. Apple has so far shipped 125,000 new iMacs since the model's launch on January 7, with an additional 5,000 units shipping each day, Jobs said.

"It's a big hit," said Jobs of the iMac. "We have not been able to keep up with demand."

Setting It Straight

He also took time to say rumors that Apple has been favoring its own stores over those of other retailers in supplying the hard-to-find machine were "not true." He said less than 10 percent of all iMac machines shipped have been sent to Apple's own stores and said the remainder have been sent to other resellers "who we value highly."

With the increase in production of the machine, Jobs said Apple expects to have caught up with demand and cleared its backlog of orders by the end of April.

Apple also took the wraps off an updated version of its iPod music player. The latest version, which has a storage capacity of 10GB or about 2,000 songs, is priced at $499. The earlier 5GB iPod remains priced at $399.

In addition, the company also unveiled a 23-inch LCD display, the Cinema HD Display, with a resolution of 1,920 x 1,200 pixels and a 16:10 aspect ratio designed to display High Definition Television content. The Cinema HD Display, which can support 16.7 million colors and has a 160-degree viewing angle, will be available in April for $3,499.

Biting at Bluetooth

On the software side, Apple announced Bluetooth support for Mac OS X, designed to allow Macintosh computers to interface with PDAs and cell phones using the short-range wireless networking technology. In April, Apple will make its Bluetooth software for Mac OS X available as a free download from its Web site and is selling a Bluetooth Universal Serial Bus adaptor for Macintosh computers for $49.

Among some of the several thousand people who attended the keynote, the announcement of Bluetooth support for Mac OS was the big news.

"Definitely, Bluetooth was the big topic," said Shinichi Rokude, an Apple user. "I want to use it to transfer addresses to my PDA."

Another user, Taizo Goda, said the addition of Bluetooth along with the announcement earlier in March by Sony of a Bluetooth card for its Clie PDA will now mean he can link the two devices. "Now I can buy a Clie," he said.

Kuriko Miyake of the IDG News Service contributed to this report.