In what can only be described as a blunder of epic proportions, Apple Computer verified on Monday that it will be dropping the price of its iMac personal computer from $1299 to $999 in February, giving users little reason to purchase the already tanking system during the Christmas season. Apple will introduce a more powerful version of the iMac in February that will use the same case but feature a faster processor and more RAM.

After the initial run on the iMac dwindled, sales have been off dramatically and a new $30 a month lease program--that looked good at first glance--would have iMac owners still paying for the machine over four years later, well after it had fallen into obsolescence. With PC prices falling to the $500 range, the iMac doesn't really compete, even on price. To pad sales, the company will try to add a third major reseller to its short list of iMac retailers. Sears is the most likely candidate.

"Sales are still \[moving\] down, but assessing it overall, it's a big statement for Apple to come in and basically change their business strategy \[and lower prices\]," said Matt Sargent of ZD Market Intelligence.

As for the most obvious problem with the iMac--the lack of removable storage, such as a floppy drive--Apple is now selling a version of the iMac that is bundled with a 120 MB SuperDrive for a about $1500