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October 13th, 1999

[4:45 PM] Apple Announces Speed Reductions In G4 Lines, Prices Stay The Same

Apple has announced a speed reduction on the entire G4 product line due to problems with G4 production from Motorola. Citing RAM prices, Fred Anderson also said that pricing would remain the same for the slower PowerMacs. The new line will consist of a 350 MHz unit which is based on the revamped Yosemite motherboard, and a 400 MHz and 450 MHz model based on the not yet shipping Sawtooth motherboard.

The new product line is as follows:

350 MHz Yosemite based Power Mac: US$1599
400 MHz Sawtooth based PowerMac: US$2499
450 MHz Sawtooth based PowerMac: US$3499

At the same time, Apple has announced that IBM will be manufacturing G4s in addition to Motorola which should help ease the production constraints.

The Mac Observer Spin: This is an unbelievably bad move for Apple, and seems very much to be a "bean counter" type of decision. It is very understandable that Apple has to rejigger the product line due to Motorola's problems, but shipping a 350 MHz pro computer is a public perception nightmare. The Wintel market now has units that are rated TWICE as fast with AMD's Athlon processor shipping in volume at 700 MHz. Intel is also about to release 700 MHz processors. This makes Apple look very far behind the Wintel competition. In our opinion, it would have been better to offer a 400 MHz Yosemite model, and a 450 MHz Sawtooth model and simply lop off the high end 500 MHz unit. That would not have cause an overly negative public opinion. Apple is going to find it very hard to sell the 350 MHz yosemite models.

Then there is the price issue. While from a financial standpoint keeping the price the same may indeed be the only thing Apple could do, it is simply not going to make the slower units any more popular. Resentment is likely to be present at the high end too as potential customers are faced with the prospect of paying some US$1000 more for the exact same machine that used to be the middle configuration. Yesterday's 450 MHz model was priced at US$2499. Today that same machine will cost US$3499. Not very appetizing.

We sympathize with the position that Apple is in with the Motorola situation, a situation outside of its control, but this is simply a bad move. Lopping off the high-end model and keeping the low-end models would have been far preferable.

Apple



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