After warning of disappointing first quarter financial results last month, Apple this week started the new year by becoming the first major vendor to slash prices across its desktop and notebook ranges.

The company axed more than $1000 (£677.40) off the price tags of its systems.

Entry-level prices for Apple's PowerMac G4 Cube were slashed from $1,799 (£1,218.64) to $1,499 (£1,015.42). The high-end 500Mhz G4 Cube with 256MB SDRAM (synchronous DRAM) memory is now priced at $2,799 (1,896.04).

The PowerMac G4 is now priced ranging from $1,299 (£879.94) to $2,499 (£1,692.82). The company also cut prices on its notebook lines. The PowerBook was reduced from $2,499 (£1,692.82) to $1,999 (£1,354.12) and the iMac notebooks now start at $1,499 (£1,015.42).

The current price cuts follow promises from Apple executives last month to reduce stock to normal levels and make room for new products.

All eyes are now on the leading PC manufacturers, especially Gateway, which like Apple also announced unhealthy pre-Christmas sales levels.