Macworld: What Steve Has Up His Sleeve


By Charles Haddad Three years ago, Apple Computer was saved by a gumdrop -- a digitized gumdrop, that is. With a bulbous little body, its screen fused to the computer, and startling fruit-like colors, the iMac was the most unlikely of heros. Lay users grew fond of the iMac, not just because of its looks but because it was a snap to set up and use. Its success revived both Apple's finances and its reputation as an innovator.

Yet the iMac has changed little since it was introduced in 1998, and it has been relegated to a backseat in the company's product lineup. Compared to the minimalist, ghostly white models Apple released in the past year, it looks like like a flamed-out holdover from the '60s.

Mac fans shouldn't despair, however. Rather, they should prepare for Act II. I predict -- based on talks with multiple sources close to the iMac -- that Apple will unveil a remade iMac at next week's Macworld San Francisco expo, which opens on Jan. 7.

RAVE REVIEWS. Apple designers have been working feverishly in secret for the past six months to give the iMac a new look and added oomph. And they're tantalizingly close to giving customers a peak at what they've come up with. It's still possible that some last-minute hitch could delay the release until Macworld Tokyo in March. But don't forget that when it comes to announcing big new products, Apple CEO Steve Jobs favors Macworld San Francisco, which is in his backyard.

No one (at least no one who is talking) has seen a final model of the new iMac. But word has been slipping out for weeks about prototypes. Here's what sources close to the gumdrop are saying. The iMac will keep its trademark all-in-one design -- but that's about it. Apple has trimmed down the iMac considerably by adding a flat-panel screen with much sharper resolution. Insiders who've seen prototypes are gushy about it. One calls the new look "nothing short of spectacular."

What gives the iMac its slick appearance is a 15-inch screen with a resolution of 1024 x 768, say those who have seen the prototype. They say the redesign now resembles Apple's Studio Display flat screen -- but with a pudgy rear end, which holds the computing components. And thanks to a DVD drive and ports for peripherals, it's also a tad thicker than the Studio Display around the middle.

NO FAN NEEDED. Apple designers have also ditched the playful, '60s-ish plastic look and refitted the machine with tougher, scratchproof materials. In texture and finish, the iMac resembles the white iBook. The revamped iMac prototype has also gained power, built around IBM's 750X "Sahara" G3 PowerPC microprocessor, which will boost speeds up to 1 gigahertz. This chip also conforms to Apple's new minimalist standards of running on low power and generating little heat, which allows the iMac to keep its distinction as the only desktop computer running without a built-in fan.

The company has also added a specially designed graphics accelerator, nVidia's next-generation GeForce2 MX, which will make this iMac a screamer on which to play games. And the iMac will become the first Mac to run OS X as the default operating system. New Macs now boot up first in OS 9.2.

You might wonder why Apple is even bothering to save the iMac. After all, the iBook can do just about anything the iMac can, plus it's far more portable. But laptops, with their miniature parts and cramped internal architecture, remain far more expensive to produce than desktops. Apple can still make money on a basic desktop, like the iMac, that sells for under $1,000. And it must have such models to remain competitive in a soft consumer market that has been flooded with stripped-down PCs that sell for less than $900 from Dell, Compaq, and Gateway.

Given Apple's goal of keeping the iMac in the $1,000 range, flat screens and 1-gig chips had been just too expensive. The company rightly decided it would be a bigger mistake to raise prices than to have the iMac just slightly outdated. In the past six months, however, component prices have plunged, and Apple engineers have been emboldened to try to gain a new advantage.

I predict you'll see the fruits of their labor next week at Macworld. Haddad, Atlanta-based correspondent for BusinessWeek, is a long-time Apple Computer buff. Follow his weekly Byte of the Apple column, only on BusinessWeek Online


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