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Thu, Jan 12, 2006 - Page 12 News List

Apple surprises with early Intel Macs

MONTHS AHEAD Apple chose the Macworld Expo to show off its new Intel-based Mac models, several months earlier than initially predicted by the market

NY TIMES NEWS SERVICE , SAN FRANCISCO

Intel CEO Paul Otellini, right, and Apple CEO Steve Jobs speak at the keynote address during 2006 Macworld in San Francisco, California, on Tuesday. Jobs announced a new iMac with Intel Core Duo processor as well as the new MacBook Pro laptop.

PHOTO: AFP

Apple Computer Inc introduced its first Macintosh computers using chips from Intel Corp on Tuesday, several months ahead of schedule.

Steve Jobs, Apple's chief executive, unveiled a new iMac computer and a new notebook computer called the MacBook Pro at Macworld Expo, a highly anticipated annual event at which the company usually shows off new products and initiatives.

Jobs also revealed that Apple's revenue for the quarter ending Dec. 31 jumped 63 percent, to US$5.7 billion. The figure easily beat Wall Street's expectations, as sales of the iPod portable music player more than tripled compared with the holiday quarter in 2004. Revenue for that quarter was US$3.5 billion.

Jobs said the company sold 14 million iPods during the holiday quarter, up from 4.5 million during the 2004 holiday season. Perhaps more surprising was the news that Apple sold 1.25 million Macintosh computers in the quarter, up from 1.05 million in 2004, despite the worries of some analysts that consumers would delay their purchases. Sales at Apple's retail stores rose to about US$1 billion, Jobs said.

The early financial disclosure marks a departure for Apple, which is considered among the most guarded of Silicon Valley companies. The company is scheduled to report earnings for the quarter on Monday.

Apple's decision to incorporate the Intel chips months ahead of time came as a surprise. Last June, the company said it was abandoning IBM Corp's Power PC processor line, which it had used for 14 years, as well as chips from its other major supplier, Freescale Semiconductor Inc. The move was considered a watershed announcement in an industry that has long considered Intel an ally of Microsoft Corp, Apple's giant rival.

Jobs has said that the Intel chips would allow Apple to make faster and more versatile computers and media devices than it could have with its previous chip suppliers.

"The iMac has already been praised as the gold standard of desktop PCs, so we hope customers really love the new iMac, which is up to twice as fast," Jobs said.

Jobs also introduced an update of Apple's iLife suite of software that is intended to make it easier to create, edit and distribute online photographs, movies, podcasts and other digital content. The company also introduced a new device to allow iPod users to listen to FM stations.

The announcements were in keeping with Apple's broader strategy of building on the success of the iPod with new hardware and services in the growing realm of digital media.

In October, Apple introduced an iPod that can play video and started selling television shows and music videos on its iTunes online store for US$1.99 each.

Jobs said Apple has sold 8 million videos and television shows since then. Apple has also been offering a remote control with new iMacs that allow customers to operate the computers as they would a television or DVD player.

Jobs said the entire Macintosh line would be converted to Intel chips by the end of this year, a move that analysts say could help take market share from Windows-based personal computers.

"This will give Apple a brighter future," said Tim Bajarin, president of Creative Strategies, a consulting firm. "I think the Intel chip is going to grab the attention of consumers."

Bob O'Donnell, an analyst at IDC, a research company, said the new Intel-based Macs would for the first time let customers compare Macs with PCs directly, since the microprocessors and other internal parts would be the same. But that could work to Apple's disadvantage, given that the company still charges a premium for its systems, O'Donnell said.

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