An iMac Game Plan

Kudos to Apple for upgrading the iMac with the Rage Pro and 6 MB of VRAM. It gives us a hint at where Apple may be taking the iMac in the future.

Already we're hearing rumors about an iMac with DVD taking the $1,299 price point while the current iMac drops in price. It's something I wouldn't mind seeing.

Apple has to walk a fine line between selling a computer at an affordable price and giving dealers the opportunity to turn a profit. With the low end PCs, it's easy. Bundle in a bigger monitor, a nice pair of speakers, or whatever else you can.

The iMac already has a monitor and stereo speakers. It also has a 56k modem and ethernet. There isn't much you can add, other than a printer, scanner, or disk drive (floppy or Zip).

Apple also sets a minimum advertised price (MAP) for its computers. Dealers who advertise lower prices are supposed to lose out on Apple funds that help pay for the ads.

Two ways around this have been instant rebates and bundling. For a while, many dealers where providing an extra 32 MB of memory with every iMac purchase. Today I've seen an ad for 64 MB free with an iMac purchase - although there is a fee for installation.

These are two important ways for dealers to add value to the iMac without getting into price wars or losing MAP support from Apple. Any future plans for the iMac should take that into account.

We can't expect Apple to unveil the Rev. C iMac until after the holidays, probably at Macworld San Francisco. There are two likely scenarios: a 64 MB iMac or a 266 MHz iMac. Either increases Apple's cost minimally while providing a great perceived value for the consumer.

And it still gives the dealer a chance to add a printer, more memory, a USB scanner, etc.

I'd guess Apple will go with the faster iMac, since memory prices are rather high these days. Then the Rev. D iMac could come out in April or May with 64 MB of memory in the lower memory socket, leaving the top socket for future expansion.

Next summer, on August 15, Apple could do Rev. E: the first 300 MHz iMac.

Somewhere along the line I expect they'll introduce a "special edition" iMac, one with DVD. Let's call it the iMac DVD. It will have 64 MB of memory and run at 300 MHz. Like the original, this can also be the basis of incremental improvements as memory drops in price and CPUs increase in speed.

And maybe to differentiate models, Apple could think different about the color scheme. Sure, Bondi and Ice is great, but why not another pair of colors for the 266 MHz and DVD versions?