They'll be competing with each other, rather than the iMac, for a market space that may not be big enough for either. A price war will probably break out between the two. Wait a month and these things will be going for under two grand. It released an urge to take profits among the ranks of more skittish investors prone to knee-jerk reaction. All news eventually becomes incorporated, or 'discounted', in the price of a stock.
Overreactions are common when bear or bull news hits the streets.
The more savvy traders made a good short-term profit on Friday by playing this news like a fiddle. This week, I expect that after a second look at the new machines by Gateway and NEC, investors will reevaluate this news as bullish for Apple. The fear of iMac-like competition from the PC world has been quelled, at least for this quarter. The Wintel consortium has once again proven that they are out of step with the prevailing fashion sense among the youthful digerati consumers. Nor can they create a savory digital consumer appliance even if their lives depended on it, as they may well.