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June 5th, 2000

[3:30 PM] From The Horses Mouth, Sears Rep Says iMac Sales Are "...Definitely Down"
by Kyle D'Addario

Wall Street analysts Steve Fortuna of Merril Lynch and Kevin McCarthy of Donaldson, Luftkin and Jenrette last week predicted iMac sales were going to slump over the next quarter. Concerned about such statements, The Mac Observer contacted a number of Sears and CompUSA retail outlets, the largest names with iMacs on their retail shelves, and both Sears and CompUSA headquarters.

It seems that iMac sales are indeed down, and both company and store representatives have been rather tight -lipped about the entire topic. We contacted one Sears store in the Buffalo NY area, and requested to speak with a computer hardware manager. We were directed to Jeffrey Lasker, who angrily declined to comment, even after we identified ourselves as members of the Mac loving press. The sales person we did speak with, however, said, "I can tell you for sure that iMac sales are definitely down."

We spoke with Retail Manager Vic Malucci at the Buffalo location of CompUSA, and he declined comment as well. He did direct us to the CompUSA Corporate headquarters, where a request for information was met with the answer, "You must fax your request for comment, and then we will take a look at it." This was, again, after we identified ourselves as member of the Macintosh media.

One representative in another New York State CompUSA location did suggest that iMac sales are up. However, this person also said that was the case due to "$25 spiffs being offered for an iMac sale". In other words, CompUSA is holding increased financial compensation over sales person's heads to help boost sales. This marks the first time that CompUSA has offered "spiffs" (commission) for iMac sales. Generally, "spiffs" are offered for selling machines that are otherwise experiencing a sales slump.

An Austin TX area Sears representative, Rick Goodwin, also refused to comment, again directing us to Sears central number. Our phone calls to Sears headquarters were not returned.

We also tried to contact Apple, and phone calls were not returned as of press time.

The Mac Observer Spin: It seems that the Wall St. analysts were on the money in predicting lower than expected iMac sales. Considering that along with the Apple Store, CompUSA and Sears are Apple's largest distributors of iMacs, the hush hush attitude toward the press raises further concern. If iMac sales were fantastic, one might expect a rather quick, canned, "Sales are fine" answer. That is clearly not the case.

Furthermore, one of our staff members worked at CompUSA for a short time, and finds the offering of sales bonuses, or "spiffs", to be particularly alarming. iMacs sold themselves for such a long time that such rewards were not necessary. Times, however, they are changing.

The iMac line has not seen revisions since the DV series was introduces, and the fastest machine tops out at a comparatively clunky 400mhz. Our best guess is that the slow processors, considering that Intel and AMD chips are now in the 700-800mhz range, are finally starting to take a real bite out of Apple sales. The iMac is geared toward the consumer users, and for many of those users speed measured by mhz is all they know. Motorola had better start mass producing faster chips, and Apple better start using them, or these negative sales trends will only continue.

Sears - CompUSA - Apple



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