Apple’s revolutionary iMac has lost it’s momentum. Continual improvement and price cutting have kept it a vital part of Apple’s product strategy, but sales have flattened and the current version, while much improved since it’s initial introduction, is in need of replacement. Apple must either cut cost significantly or add value to it’s consumer offering. My vote goes with adding value in the form of an LCD screen. The challenge is to keep costs under control. I am convinced that an iMac with LCD screen must retail for $999 as a base model. In order to achieve this, Apple would need to stick with a G3 processor and opt for a 14″ display. The hard drive would need to stay an inexpensive 3.5″ model and like the iBook, it will probably ship with too little memory in base form. The base optical drive would remain a CD and the airport card an option. I think with these specifications, $999 may not be possible possible. Although the price of LCD screens has plummeted due to a weak market, prices could rebound and this would translate into slim margins or price increases for future iMacs. Risky business.

A replacement for the G4 tower is also likely. I have never been a fan of the current bulky enclosure. I would like to see a significant reduction in size along with the ability to add a third removable drive and additional PCI card. Give it a neat appearance like the current PowerBook or iBook and I would be satisfied.

Cube pricing proved to be a fatal error. The PowerBook G4 and new iBook hav shown that Apple can provide great value in it’s products. Here’s hoping that Apple unveils new desktop machines that are just as successful.