Apple is upgrading the iMac and considering price cuts in a bid to bolster flagging sales of its LCD desktop G4, industry sources claim.

The claims follow news that Apple US is lumbered with a growing inventory of iMacs, and the revelation that Taiwan-based iMac parts-suppliers and assemblers are reporting reductions in shipments.

Following the launch of the imac, Taipei-based Quanta Computer, which assembles the new iMac, initially raised output to 200,000 units a month, using production lines originally intended for Dell. Now the company is reporting halted and reduced shipments.

Between 550,000 and 600,000 iMacs were expected to sell before August, but that figure has been revised to be around 400,000, according to DigiTimes.

Apple predicts that it will sell at least one million new iMacs this year.