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Apple tests history with iMac increases

Along with public perception, Apple’s recent iMac price hike could be setting the company up for a challenge with history. According to Wall Street Journal reporter Jim Carlton in his best-seller, Apple: The Inside Story of Intrigue, Egomania and Business Blunders, a similar Mac price increase of up to 29 percent in 1988 ended up slashing Apple’s profit margins from 51 percent to 48 percent. As a result, Apple posted its first quarterly loss after 12 straight quarters of profit and was stuck with a pile of expensive, un-needed DRAMs as customers bought stripped-down Macs. “…it was the stupid move to end all stupid moves,” Carlton wrote. Former Apple exec Jean-Louis Gassee remembers, “I thought we had a better product than anyone else and we should charge more for it. This is not always a good idea, as we found out.” This time around, Apple is raising prices 7.2 percent on the low-end iMac, 6.3 percent on the mid-range, and 5.3 percent on the high-end model due to component price increases. continued…

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