The Wall Street Journal
(Copyright (c) 1993, Dow Jones & Co., Inc.)
CUPERTINO, Calif. -- Apple Computer Inc. launched its fifth round of price cuts since April, chopping suggested retail prices on three of its higher-priced personal computers as much as one-third.
The reductions are part of a broad price-cutting program the company has implemented to boost U.S. sales. Apple has trimmed suggested retail prices, especially on its more expensive machines, on a monthly basis since the program began in April. Analysts say the cuts were necessary to bring Apple's traditional premium prices into line with less-expensive International Business Machines Corp.compatible PCs using Intel Corp. computer chips and Microsoft Corp. software.
An Apple spokeswoman said that the price-cutting strategy has been successful, although she declined to provide specific sales figures since the program began. "Unit shipments of our Macintosh products have picked up significantly since we began implementing our new pricing strategy," Robert Puette, president of Apple USA, said in a statement.
Apple's action, effective immediately, included price cuts on its PowerBook Duo line, the Macintosh Centris 650 and the Macintosh Quadra 800 computers. The sharpest cut was on Apple's Centris 650 line, which dropped to $2,139 from $3,189.
The spokeswoman said that in addition to spurring sales the price cuts were designed to open a niche for newer, more expensive Centris and Quadra models featuring audio-visual extras that were introduced Monday by Apple. The company had already cut its price for the slow-selling PowerBook Duo machine once in April.
Analysts said they expected the company's latest round of price-cutting. "This isn't any surprise," said Wendy Abramowitz of Argus Research Corp., adding that she expects some additional price-cutting by Apple. "Obviously, they're cutting prices because their products aren't selling well," she said.
Last month, Apple reported a loss of $188.3 million, or $1.63 a share, for its third quarter ended June 25. The loss was unexpectedly large compared with net income of $131.7 million, or $1.07 a share, the year earlier. Sales rose 7% to $1.86 billion.
Yesterday, in national over-the-counter trading, Apple's shares closed at $29, up 50 cents, on volume of 1.6 million shares, down sharply from average daily volume of 2.5 million shares.