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Apple cuts laptop price to $999

Goal is to stimulate holiday sales amid economic turmoil

''Demand is going to be good,'' chief executive Steve Jobs said yesterday of Apple's MacBooks. ''We're making a lot of them.'' ''Demand is going to be good,'' chief executive Steve Jobs said yesterday of Apple's MacBooks. ''We're making a lot of them.'' (Tony Avelar/Bloomberg News)
Bloomberg News / October 15, 2008
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SAN FRANCISCO - Apple Inc. plans to offer its first Macintosh notebook priced at less than $1,000 this holiday shopping season to attract budget-conscious US consumers stung by the global economic crisis.

Chief executive Steve Jobs cut the price on the current MacBook models to $999 yesterday at an event at Apple's headquarters in Cupertino, Calif. He also introduced an aluminum-clad version with a glass display that will sell for $1,299 and updated the MacBook Pro line with slimmer models.

The stock fell 5.6 percent. Investors may be concerned the price reduction won't be big enough to persuade consumers to buy amid the economic slump, said Piper Jaffray & Co. analyst Gene Munster.

Apple gets half of its revenue from the Mac, with laptop sales climbing at more than twice the pace of desktops last year. The MacBook is Apple's best-selling machine, Jobs said.

"People wanted a price cut," Munster, based in Minneapolis, said. "They wanted $900 MacBooks." Still, consumers probably will be impressed with the new designs, which represent a "substantial upgrade," he said.

The current MacBook, enclosed in a white plastic casing, had sold for $1,099.

"Demand is going to be good," Jobs said of the MacBooks. "We're making a lot of them."

Jobs also showed new versions of the ultra-portable MacBook Air and the more powerful Pro laptops with more memory and faster graphics chips from Nvidia Corp. The Pro model, which measures 0.95 inches thick, will go on sale today for $1,999, the same as the previous model.

The updated MacBook Air, also less than an inch thick, will be released in November. The starting price remains at $1,799.

Apple gets more than 80 percent of its revenue from consumers and half of its sales from the United States, according to New York-based analyst Toni Sacconaghi at Sanford C. Bernstein & Co.

The United States is the largest market for PCs overall, and consumer purchases of portable computers have driven much of the industry's gains over the past three years.

While predicting PC growth in 2009 is difficult, given the economic environment, Sacconaghi said that Apple's Mac shipments may still rise 13 percent while the rest of the market stagnates.

Apple shares fell $6.18 to $104.08. The shares have declined 47 percent this year amid waning consumer confidence and concern about Jobs's health.

On Oct. 3, the stock fell as much as 5.4 percent after CNN's iReport.com reported erroneously that Jobs had a heart attack.

Yesterday, he joked about his health, giving his blood pressure but declining to take any other questions on health matters.

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