Improvements included one or two 1.33 GHz PowerPC G4 processors, faster memory, and higher capacity Ultra ATA/133 hard disk drives.

A new model, the Xserve Cluster node was announced at the same price as the single-processor Xserve, featuring two 1.33 GHz processors, no optical drive, a single hard drive bay, no video or Ethernet cards, and a 10-client version of "Jaguar" server.

The higher memory capacity and bandwidth as well as the stronger floating-point performance of the PowerPC 970 made it more suitable for high-performance computing (HPC) applications.

They use Intel Xeon ('Woodcrest') processors, DDR2 ECC FB-DIMMs, ATI Radeon graphics, a maximum storage capacity of 2.25 TB when used with three 750 GB drives, optional redundant power supplies and a 1U rack form factor.

On April 7, 2009 Xserve was updated to use Intel Xeon ('Gainestown') processors, DDR3 memory, and NVIDIA graphics with Mini DisplayPort output.

It is also Apple's first Xserve to use PVC-free internal cables and components and contain no brominated flame retardants.

In addition to improved functionality Mac OS X 10.6 Server added support for up to 96 GB of RAM.

While accepting orders for the current model until January 31, 2011, and "honoring" all Xserve warranties and extended support programs, the company suggested users switch to Mac Pro Server or Mac Mini Server.

[2] After the Xserve's discontinuation, an annoyed customer emailed Steve Jobs, who responded that "hardly anyone was buying them".