New iMac design dazzles Macworld crowd

Breathing new life into its iMac line of home and small business computers,

Steve Jobs took the stage at the annual MacWorld trade show to launch the next

generation iMacs that sport a design as radical and innovative as the original

machine.

The new iMac features an all-in-one design. But this time the machine sports

a 15-inch flat screen display pivoting out of a white dome base that contains

most of the machine's circuitry and other devices. The new iMacs are built

around Apple's G4 microprocessor that was previously only available in the

company's high-end computers. They will be shipped this quarter and Jobs said he

expects to sell 12 million units this year for between $1,299 and $1,799. The

latter will include a drive capable of writing data and transferring video to

DVDs. "We expect demand to be large," Jobs said, adding that Apple

engineers and designers have been working on the new all-in-one iMac for the

past two years. Jobs said the radically revamped design has been worth the wait.

"This is the best thing, I think, we've ever done," Jobs told the

MacWorld crowd.

The new iMac is the latest effort to lure customers by offering machines with

radical designs. The strategy worked well for the original iMac. But a

cube-shaped machine failed miserably two years ago. Jobs conceded that Apple

made some mistakes when it pushed the design envelope with the $2000 Cube. But

he predicted the new iMac would not meet the same fate as the Cube. "The

Cube was targeted at low-end pros. We were just plain wrong on that. Consumers

loved the Cube, but it was too expensive. This, I think, is a more stunning

design than the Cube and it is priced dramatically less. I don't think we'll be

able to make enough."

By incorporating what had been premium features, including flat screens and

the G4 chip, Apple is challenging its own business model. But analysts said

Apple needed to leverage its higher-end technology to generate new interest in

high-volume products as sales of the candy-colored iMacs has fallen off in the

past year. On the high-end, Apple now needs to push new technologies in order to

prevent cannibalizing the sales of its more profitable PowerMac systems.

Apple also launched a new 14-inch portable iBook PC. Apple also said it would

make its OS X operating system standard on all new Macs and unveiled iPhoto,

which lets users create slide shows of digital photographs and order prints and

custom-bound photo albums online. In a statement that disappointed some industry

analysts, Jobs said he was not ready to merge the personal computer with the

television despite the company's "digital hub" strategy had given the

impression that Apple would seek to integrate the TV, now the hub of the family

entertainment center, into this high-tech hub. "Do we think that PCs and

televisions are going to merge? No. The next great age of the personal computer

is going to be the digital hub," Jobs said.

Apple non-TV strategy differs from that of Microsoft, which has been pushing

hard to integrate PC and TV functionalities. Having added a number of key

digital hub components, including the new iMac, iPhoto, digital juke box and

video editing programs and the iPod MPs player, Jobs said Apple will continue to

add digital hub components this year. "I think you'll be seeing a lot of

different things. We'll clearly be continuing to refine the digital hub suite of

applications. We may have some other surprises," Jobs said.