Apple Reaches Deeper Into PC Market For Holiday Season

The price cut is important as PC makers head toward the Christmas season unsure of how the Wall Street meltdown will affect consumer spending.

Apple's MacBook Family
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Apple's MacBook Family
Apple's latest MacBook Pro

Apple's latest MacBooks should widen the computer maker's appeal among consumers as the holiday-shopping season approaches, according to analysts' projections.

Apple chief executive Steve Jobs on Tuesday launched lighter aluminum MacBooks with faster graphics and better displays. The aluminum casing, common with the MacBook Pro, was introduced for the first time in the less-expensive MacBook line.

At the same time, Apple lowered the price of the entry-level, 13-inch white plastic MacBook by $100 to $999. By taking the system below $1,000, Apple broke a psychological barrier that could sway some consumers looking at Windows notebooks in the same price range.

The price cut is also important as PC makers head toward the Christmas season unsure of how the Wall Street meltdown will affect consumer spending.

"Because of economic conditions and pricing trends in the market, Apple needed to lower its entry point and make is products more affordable," Charles Smulders, analyst for Gartner, told InformationWeek. "That's not to say Apple is planning to compete in the low end of the market. It's still at the higher end. But the price cut broadens its market appeal and could position it to move further down if necessary."

Apple, however, is likely to remain cautious in lowering prices. "It's a lot harder to move prices up than to move them down," Smulders said.

Apple's new 13-inch aluminum MacBook sells for $1,299, which makes the system a reasonable choice for people who want more muscle than the entry-level machine. Apple also unveiled a 15-inch MacBook for $1,599.

In marketing the latest machines, Jobs made a big deal over the new unibody design. Rather than stitch together several pieces of aluminum, Apple uses a manufacturing process that starts with one piece of metal and carves out the product. As a result, the notebooks are slightly thinner and lighter than the previous generation.

In the third quarter, Apple maintained its third position in the U.S. PC market behind Dell and Hewlett-Packard, according to the latest figures from Gartner. In terms of unit shipments, Apple had 9.5% of the market, compared with 7.7% for the same quarter a year ago. The company is expected to see steady growth in the education and home PC market.

Apple claims customers favor a metal body on notebooks, so the new design should prove attractive. Gartner, however, said the design is likely to be more interesting to the industry than to most potential customers.

"The technology is interesting to the industry, but how interesting it is to customers remains to be seen," Smulders said. "It's more Apple signaling to the market its technology prowess."

Other major enhancements to the product line were a switch from Intel's integrated graphics chipset to the Nvidia 9400M chipset, an LED-backlit display with a glass front, and a 39% larger, multi-touch glass trackpad. The LED-backlit display shows colors more vividly and has a higher contrast level than LCD screens in previous MacBook models.

The Nvidia chipset runs five times faster than the Intel product used in previous MacBooks, according to Apple. The new 15-inch MacBook Pro, which starts at $1,999, also includes a 9600M GT graphics card that enables users to switch to "turbo mode" when higher graphics performance is needed. The better graphics, however, reduce the notebooks' five hours of battery life by about an hour.