Apple Announces G3 Line, Opens Online Store

Apple Computer Inc. today said it will sell its entire range of products on the World Wide Web, including a new line of PowerPC G3 computers that people can buy built-to-order. Apple's line of G3 (Third Generation) systems, based on the new PowerPC G3 processor, will run much faster than Intel Corp.'s Pentium-based systems, claims Apple's Interim CEO Steve Jobs.

Apple Computer Inc. today said it will sell its entire range of products on the World Wide Web, including a new line of PowerPC G3 computers that people can buy built-to-order.

Apple's line of G3 (Third Generation) systems, based on the new PowerPC G3 processor, will run much faster than Intel Corp.'s Pentium-based systems, said Apple's Interim CEO Steve Jobs at a press conference held here today.

The G3 line includes the US$1,999 G3 Desktop, the $2,449 G3 Minitower and the $5,699 G3 PowerBook.

At least one industry analyst said the machines are competitive with the fastest machines from Intel.

"In general, the testing I've done with the G3 has shown it to be a very, very fast processor, and comparable to the Pentium in every way," said Jim Statten, an analyst at Dataquest Inc. in San Jose, California.

However, analysts were divided on the effect the distribution and design changes will have on Apple's beleagured sales.

Starting today, customers in the U.S. can order built-to-order versions of the G3 desktop and minitower, and pre-configured versions of Apple's other systems. Apple will make other systems on a built-to-order basis in the coming months, officials said.

Customers who order the G3 systems will be able to specify features like the processor speed, RAM and video memory, hard disk capacity, monitor size and other features, Apple said.

The orders from the Web go straight to the factory floor, where Apple has streamlined its production process to be able to turn around requests for customized machines quickly, said Dataquest's Statten.

"It's a good strategy. Apple's core market is in publishing, and a lot of those people want more than just the basic configuration," he said.

Another analyst said the build-to-order model could breath some life into Apple's lagging hardware sales, but was doubtful the changes will be enough to revive Apple's fortunes.

"It's an okay box but it's not going to lift them out of Hades," Roger Kay, senior analyst at IDC Corp. in Framingham, Massachusetts, said of the G3 Desktop. "Running Mac applications fast will make their existing user-base very happy, but it may only marginally increase their sales."

Apple's unit share of the personal computer market worldwide for their most recent financial quarter was 31 percent lower than in the same quarter last year, according to IDC studies, Kay said.

"I see the effect of these changes as being marginal; it's not going to change the tide," Kay said.

Eric Lewis, also of IDC, agreed. "They're fixing things that were wrong and keeping up with the industry," he said. But "none of this changes radically their market position."

Lewis did note that Apple is offering either free shipping through United Parcel Service ground service of products purchased online, or pay $35 for Airborne Express which is faster. Other online distributors don't offer free shipping, he said.

Each G3 system features a PowerPC processor running at 233 MHz or 266 MHz; 512K of Level 2 memory cache running at 117 MHz or 133 MHz; a 66 MHz system and main memory bus; and 32 M-bytes of RAM, expandable to 192 M bytes or 384 M bytes.

Also standard are a 64-bit graphics and multimedia accelerator chip with 2 M bytes of graphics memory, three standard 12-inch PCI slots, Ethernet and other features. Storage capabilities include an internal 4G-Byte or 6G-Byte hard drive, and an internal 24-speed CD-ROM, officials said.

Statten said the pricing for the systems is "right where they need to be," falling at about the same price as the least expensive Pentium II-based machine.

However, Apple may have left a gap in its product line at the $1,000 level. "They might feel a loss there, especially with the Christmas market coming up," Statten said.

In the first quarter of 1998, Apple will also offer online shopping to customers in Japan and Europe, who will be able to purchase products in local currencies, officials said.

At the press conference Apple also re-launched its "Think Different" marketing campaign. "We are thinking different about everything we do at Apple Inc.," Jobs said.

Apple, in Cupertino, can be reached at +1-408-996-1010, or on the Web at http://www.apple.com/.

(Elinor Mills of the IDG News Service contributed to this report.)

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