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Steve Jobs continues to think differently from the rest of the computer industry.

In a market where PCs sell for $699,


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unveiled on Monday a two-year epic revamp of its iMac line, first introduced in 1998, ranging in price from $1,299 on up to $1,799. Apple's PC rivals are singularly focused on ever-streamlining their distribution systems and attempting to pass on minute component cost savings. Meanwhile, Steve Jobs continues his quest for consumer whiplash, vowing that innovation is the only way for Apple, with less than 5% PC market share, to compete.

Apple updated its low-end desktop consumer model a day before both the Consumer Electronics Show and the opening of the Macworld San Francisco conference.

Jobs delivered a two-hour keynote in which he lauded Apple's OS X operating system, a new application called iPhoto that would allow users to skillfully manage and edit digital photos, lower prices on iBook laptops and, as the grand finale, a new version of the iMac computer line that re-established Jobs as Apple's messiah after Gil Amelio's departure in 1997.

Apple's stock climbed more than 5% in the week leading up to the announcement, but fell more than 3% Monday to close at $22.90; the computer maker's shares are up 58% since Oct. 3. Investors elevated Apple's stock on a flurry of pre-Macworld rumors that ranged from an Apple move to


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processors, the acquisition of PDA maker

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or the unveiling of a new PDA of Apple's own creation.

Eye on Apple
No worm seen

Investors will be relieved to have the most obvious gap in Apple's product lineup filled, albeit after the close of a better-than-expected holiday season in the PC world. And the Street will continue to lament Apple's stubborn refusal to compete on the PC industry's terms.

The original iMacs eschewed wires and the uniformly beige tower design of other personal computers for a bulbous colorful unit integrated into the same case as the monitor. The 2002 iMacs feature an adjustable flat panel display connected by hinged metal arm to a computing unit, which most closely resembles the top half of a glossy white basketball.

"Isn't that the most beautiful bottom of a computer?" Jobs mused when turning the hemispheric iMac upside down to explain the process for upgrading the machine. It is safe to say Michael Dell and Michael Capellas have never been inspired to utter such words.

Apple is offering three versions of the iMac, with the $1799 model due out by the end of January complete with an 800 MHz G4 processor and the coveted SuperDrive that allows reading and writing of both CD-ROMs and DVDs. A scaled down $1,499 model will ship in February, and a $1,299 entry-level machine with writeable CD-ROM capability as well as the G4 processor will move in March.

Current consensus estimates call for Apple to reach 9% revenue growth in 2002, according to

Apple has been frustrated in the past year and a half by the economic environment and the cool reception to the higher-end G4 Cube, with a breakthrough shape that was supposed to appeal to the design-obsessed Mac faithful. Jobs dubbed the Cube the "coolest computer ever," but it failed to entice buyers. The market has been waiting ever since for a surefire, retooled iMac line. Jobs acknowledged the lapse with self-deprecating humor: "I know some of you wanted it sooner, but I think you'll agree it's worth the wait."

Apple lost 73 cents a share in its first quarter of 2001, contributing to a 27 cents a share shortfall in its fiscal 2001 that ended before the holiday season. The boxmaker reports first quarter 2002 earnings next week and is expected to produce an 11-cents-a-share profit on $1.4 billion in revenue. The Street will eagerly await the second quarter's results for an idea of whether Apple's newest work of art will give its low-end desktop product line a long-awaited bounce.