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TMO Reports - Apple Stops Taking iMac Orders; New Models in September
by , 6:15 PM EDT, July 1st, 2004
Apple Computer announced Thursday it has stopped taking orders for its current line of iMac desktop computers and publicly stated that new models will be introduced in September. The announcement came after trading in Apple shares ended on the NASDAQ stock market.
Customers worldwide began receiving a message Thursday when trying to order an iMac through the company's online store that read, "Apple has stopped taking orders for the current iMac as we begin the transition from the current iMac line to an all-new iMac line which will be announced and available in September. We planned to have our next generation iMac ready by the time the inventory of current iMacs runs out in the next few weeks, but our planning was obviously less than perfect. We apologize for any inconvenience to our customers."
Members of the media and analysts also received the same statement late Thursday via e-mail. An Apple press spokesperson officially confirmed the online posting to the Mac Observer, but declined to comment beyond the statement issued.
Calls to Apple retail stores and independent dealers confirm they are no longer taking orders. Six Apple retail stores contacted by The Mac Observer Thursday confirmed they have no remaining stock of iMacs. A sales staff member at the Apple store in Dallas, Texas told TMO he was informed no more iMac orders were to be taken on Wednesday.
The public statement is an unusual one for Apple who historically does not talk about new models or the time frame for new models until an official rollout is made. Industry analyst Joe Wilcox of Jupiter Research believes that Apple might have strategically planned the announcement to happen in this manner.
"This is a smart marketing move," Wilcox said. "In some ways Apple might be learning how to turn the 'rumor mill' to its advantage. Apple usually doesn't announce that something is coming with this much detail. So how much 'buzz' do you think Apple is going to get out of this little maneuver? A lot I think."
There was much speculation over the past few weeks that Apple would announce new models at its World Wide Developers Conference, now going on in San Francisco, Calif. No new models were announced, but instead the rollout of new flat-panel displays.
Independent dealers in the U.S. were told over a month ago that current iMac models were being discontinued. Many dealers report they were unable to buy iMacs from Apple and independent distributors starting about two weeks ago.
Sales of current iMac models were flat in the last quarter compared to the prvious quarter as well as a year ago. The company reported in the second quarter that it sold 217,000 iMacs worldwide for a revenue of US$252 million, down 4% from the previous quarter. Compared to the same quarter a year earlier, unit sales were off 15% and revenue was down 17%. Of note, total iMac sales include eMac sales as well as Apple does not breakdown individual CPU numbers. Analysts believe for the second quarter, Apple sold around 150,000 iMacs.
Apple introduced the current flat-panel iMac model in January 2002, some 29 months ago. It then upgraded the line in February 2003 with the 17-inch widescreen model featuring a 1 GHz G4 processor and a 15-inch flat panel model with a 800 MHz processor. Apple last upgraded the iMac line on November 18, 2003 with a 20- and 17-inch model running at 1.25 GHz and a 15-inch model at 1.0 GHz.
An Apple corporate representative told TMO Thursday that today's announcement would have no affect on third-quarter earnings, which ended Wednesday, but declined to speculate on the impact for the current quarter, which ends in September. Apple will announce its third quarter financial results on Wednesday, July 14, and will webcast the conference call beginning at 5:00pm EDT.
The announcement from Apple came after the close of the NASDAQ stock market, Thursday. Apple's stock price closed down 24 cents in regular trading at $32.30. In after hours trading, shares of Apple Computer closed down $1.80 to $30.50, or down 5.57%.
Observer Comments
Thu Jul 01, 2004 6:50 pm Subject: About friggin' time
Thu Jul 01, 2004 7:20 pm Subject:
Thu Jul 01, 2004 8:51 pm Subject: Final Coup de Grace For Mac Business
Thu Jul 01, 2004 9:08 pm Subject: I don't think...
Thu Jul 01, 2004 9:42 pm Subject: Re: Final Coup de Grace For Mac Business
QuoteRealityCheck wrote:
Not good news for Apple stockholders, the new G5 iMacs will miss the back-to-school season. Any bets the "announced and available in September" means available to order, not that anyone will get one in September.
For the most part the education buying season is over. Apple made education orders a priority back in early spring. The LCD iMac is more popular with consumers than education buyers. Apple's push in education is the eMac and iBook.
Apple will ship the new iMac before the end of September.
All existing orders will be filled and Apple has a chance to clear the channel of all inventory before the introduction of the new iMac.
The new iMac will ship before the end of the reporting quarter. Apple books sales when CPUs are shipped into the channel, not when they are delivered to the customer. This is actually good news for Apple.
The only "bad" thing that might happen is if Apple were to miss the September ship dates. This happened back in '99 with the introduction of the first G4s.
It took Wall Street analysts about a day to figure if the units weren't shipped in the fourth fiscal quarter they would be shipped in the following first fiscal quarter.
Apple will need to relase product information and anticipated unit sales for the new systems for the September quarter.
Thu Jul 01, 2004 10:48 pm Subject: Hey RC, what do you have to say about...
Is it wrong for me to want one of... whatever's coming next... already? I have no idea what's in the pipeline yet, but I want it - the likelihood of some sort of meltdown or not!
(Let's face it - something went wrong here. The iMac was either supposed to be ready by now or demand skyrocketed. I'd have to presume the former)
Fri Jul 02, 2004 12:57 am Subject: I Hope I Hope I Hope I Hope
I hope it has the snake-y thing.
OK, all you guys just simma-dow-now. You're going nuts over nothing.
They're working on a new iMac. It's not ready to ship yet and they don't want to sell a 2.5 year-old machine any more. Big deal. Especially since iMac sales were pretty lethargic anyway. I mean, the eMac took the place of the iMac and everybody else bought towers. The iMac just wasn't cutting it. Why sell them for 3 more months and tick everbody off.
Y'all should be glad Apple is "opening up." There are a lot of complaints about Apple's secrecy - well, here ya go...
P.S. I heard the new iMac cures cancer!
Now we actually know why 15 minutes were cut from Steve J's keynote. In fact it is what most people thought.
In terms of basic design, I think that is solid - probably having started before the G5 PM was announced and worked to a final stage after getting samples of the 970FX.
So what happened? We know that test production runs were made. That means all parts were available and (G5?) iMacs were put together.
It also means that something came up when those new iMacs were turned on. My bet is that one of the components which worked well in the prototype stage did not perform the same when put into production. As there have been a lot of PRODUCTION 970FX chips to work with I don't think that this is the problem. My best 2 bets are graphics or mother boards. The key is that it appears that the problem presented itself on the initial test production iMacs.
So where are we now? One supplier is up to their ass in alligators trying to solve the problem. Apple is going to loose a lot of sales, and that supplier might be paying for some of that loss. Also, Apple has broken their silence and a lot of people are going to start saving their pennies like mad.
We are also going to find out what the specific problem is no later than the 14th when Apple presents the last quarter's performance. You KNOW that there are going to questions asked and they are going to need to be answered - and answered big time.
We can also assume that Apple made the announcement today to take some of the heat off the stock before the 14th. It makes the bad news on the 14th less of a hit on the stock because no one is going to be expecting good news. It also allows time for a lot of people to speculate about something fantastic coming very soon, which makes it very difficult for brokers to issue a Sell recommendation.
With all the problems this year I have to give Steve J a major pat on the back for his performance in the keynote. You know that was a tough one to get through when he was probably as pissed (and frustrated) as a person can get.
Next week is going to be an interesting one. Lots of questions from the press AND Wall Street - it's going to be difficult NOT to answer the questions. My belief is that Apple needs to work with their best contacts (like TMO), letting a little bit out each day or so. It's time to rally the faithful and to look towards something exciting next week.
Showing the new iMac and accepting orders will probably happen as soon as the problem component is delivered in a properly working form and pre-production runs test as they should. Everything else is ready to go.
And I'm saving my pennies.
Quotekenaustus wrote:
With all the problems this year I have to give Steve J a major pat on the back for his performance in the keynote. You know that was a tough one to get through when he was probably as pissed (and frustrated) as a person can get.
Do you suppose that problems realizing the G5 iMac might have contributed to spinning off the iPod division? I mean, perhaps Steve realized the company was just too taxed with all the iPod furor and they needed a "wall" between the teams in order to get them functioning properly?
Fri Jul 02, 2004 1:22 am Subject:
Apple has chosen not to accept any more iMac orders on the first day of the calendar quarter. This means the channel has sufficient inventory to meet the previous quarter's results.
The iMac has been losing sales momentum since a couple of quarters following its release. This is not a big deal. It's almost funny. It's time for Apple to open up, explain any apparent delay and deliver a decent product roadmap.
QuoteInteresting. And when you consider that Tiger's new 64-bit features were touted at the conference, it would have made sense to introduce the 64-bit consumer product along with it.kenaustus wrote:
Now we actually know why 15 minutes were cut from Steve J's keynote. In fact it is what most people thought.
Honestly, folks, I am with Joe Wilcox on this one. It's a publicity stunt, and it's a fabulous one. This sort of move is somewhat unprecendented, and is already garnering enormous PR for Apple. Enormous.
Now, it's possible that the stunt was made necessary by some idiotic planning on someone's part, or perhaps some huge unforeseen problem somewhere, but even if that's the case, the folks at 1 Infinite Loop have made sweet lemonade from a pile of lemons.
Again, though, I think it more likely to be a deliberate move. After all, it would be easy-peasy Japanesy (or Taiwanesy, as the case may be) to simply crank up some factory time and roll out another 50,000 units to satisfy demand until September.
Time will tell, of course. 
Fri Jul 02, 2004 7:20 am Subject: Suppose that it is early
Fri Jul 02, 2004 8:53 am Subject: Not a publicity stunt
If Apple were merely pulling a "stunt," or if they surprised everybody with a new iMac after the holiday, or any of the other wild speculation going on, they'd be subject to shareholder lawsuits.
The miscalculated how long the existing iMac inventory would last, and ran into some design and manufacturing difficulties with the next iMac. They screwed up, pure and simple. Things happen.
Apple may try to make lemonade from all this, but it's ridiculous to think this was an intentional or wanted happening.
I really think this was an engineering issue. Apple has done the "build suspense until the unveiling" thing before but this doesn't feel like that. It feels more like a "oh, S*** the production units run too hot" or something like that. I applaud them for being honest about the delay but I have to believe that if they had any way of getting these units out now they would. For that matter it is very possible that the new iMac could be available before September. This might be a worst case date and they are burning the midnight oil to get it resolved ASAP.
If iMac sales are down so much, then how would they have miscalculated the remaining inventory by such a huge margin? If iMacs were selling fast then I could understand them running out a month or two early.
They must have stopped making them quite a while ago. They were probably expecting them to run out around now. And they did. They were obviously all ready to unveil the new iMac and then BLAM something horrible delayed the release. But this does also mean that if they can fix the issue sooner we will see the iMacs sooner.
And as far as educational sales go, RC, thats what iBooks and eMacs are for. As the above poster said, the educational buying season is already well underway if not almost over. You'll notice that the new eMac's were released in plenty of time for this! My girlfriend's little sister needs a new computer for college and she's gonna be getting an eMac. First Mac in the family. I doubt it will be the last.
QuoteIt's all speculation of course, but my speculation is based on Apple no longer offering single-G5 PowerMacs. It's reasonable to expect Apple to soon offer single G5 processor computers, and we know new iMacs are coming up. So it's not too crazy to believe that the new iMacs will have a G5 chip in them.Guest wrote:
Why is everybody so certain it will be a G5 iMac? It would make sense to include a G5 (higher GHZ than G4), but we may discover it is only a 1.5 GHZ G4 after all. Which would be a downer!
Fri Jul 02, 2004 9:31 am Subject: Not Stupid Blunder, Not PR Kick, just honesty
Hey, you idiot "how could apple bungle this so badly" naysayers... do you have any freaking idea what is going on in the economy right now? All sorts of manufacturing companies are getting orders that are beginning to outstrip CAPACITY. They didn't make a mistake in forcasting, it's that the market has f'ing started taking methamphetamines... not relly a whole lot a company can do about that... my guess is it went something like this...
Some time around jan, SJ & Execs got the current good market forecast, couted up stock parts, added some buffer and then told the MB and graphics cards suppliers, okay, pull the trigger and change over to the new stuff we're going to use... then by the june, the demand for imacs was showing no sign of slowing, then they had to make the hard decision of... do we tell the suppliers to go back to the old tooling? (which means they would take it in the a$$ for not having supply when they launch) or just issue an honest statement to the public?
which would you choose?
Fri Jul 02, 2004 1:22 pm Subject: Brilliant Publicity Stunt - Apple To Stop Selling All Mac
Fri Jul 02, 2004 3:01 pm Subject: RC = Paul Thurrott
Fri Jul 02, 2004 5:19 pm Subject: Re: RC = Paul Thurrott
QuoteBryan wrote:
Actually, RC stands for Paul Thurrott. He's just too cowardly to sign his name.
Really? The only Paul Thurrott I've heard of is a public Windows shill. I can't imagine a person who spends so much time talking up Windows would be wasting time with moronic posts in a Mac forum community.
Fri Jul 02, 2004 6:56 pm Subject: Silly Paul/RC
QuoteDawnTreader wrote:QuoteBryan wrote:
Actually, RC stands for Paul Thurrott. He's just too cowardly to sign his name.
Really? The only Paul Thurrott I've heard of is a public Windows shill. I can't imagine a person who spends so much time talking up Windows would be wasting time with moronic posts in a Mac forum community.
I wouldn't rule it out. Just surf on over to his silly little "Internet Nexus" blog and you'll see an uncanny similarity between what RC spews forth and what Paul, who fancies himself a "technology reporter," says. For someone who is supposed to be writing about Windows, the fixation that the guy has with Apple is amazing. To add to this amazing case study in bizarre behavior, the guy actually owns and uses some Apple products.
Fri Jul 02, 2004 9:57 pm Subject: Re: Silly Paul/RC
QuoteJohn F. Braun wrote:
I wouldn't rule it out. Just surf on over to his silly little "Internet Nexus" blog and you'll see an uncanny similarity between what RC spews forth and what Paul, who fancies himself a "technology reporter," says. For someone who is supposed to be writing about Windows, the fixation that the guy has with Apple is amazing. To add to this amazing case study in bizarre behavior, the guy actually owns and uses some Apple products.
Yikes. Out of the exactly 100 posts on the front page, I counted at least 48 posts that were primarily about a topic Apple-related. Holy obsession, Batman!
And for being such a huge Windows fan, he sure advocates Firefox/Thunderbird a lot. Hmm. (Although, I guess advocating the use IE/OE is a whole new level of psychosis...)
Fri Jul 02, 2004 10:28 pm Subject:
I betcha the guy slinks around an office in Hush Puppies during the day, disguising his latent Mac tendencies, only to come home to home filled with Macs and a room plastered with iPod and Seal posters.
What a shocker!
I bet there are tens of thousands of Windows system administrators just like him. He'll just be one of the first to fall.
You know the old saying, "Once you go Mac, you never go back!" Anyone want to crash his Mac "coming out party" with me?
QuoteDawnTreader wrote:
Wow!
I can't imagine that kind of inner conflict (closet Mac wanna-be, public Microsoft shill), but I wouldn't mind all of that free time!
Imagine that! Preaches Windows by day, Mac obsessed by night!
The psychobabble term for this is "cognitive dissonance." The more shrill he gets, the greater the likelihood that, one of these days, his head will blow up.
This info is courtesy of my lovely bride, who has a degree in psychobabble.
Sun Jul 04, 2004 1:46 pm Subject: Not a "stunt," here's the explanation:
Apple didn't announce the new iMac at WWDC, but was running out of old models fast. They can't just stop selling them without any explanation. "Uhhh, sorry, we ran out." That would be stupid. Rumors and analysis of rumors would overshadow any September announcement, which by the way, is the *only* time to release a new consumer product (look for the new iPod then, too).
So the next best thing is to offer a specific, yet vague, explanation of what's going on. Yes it produced some buzz, but the timing of the announcement is more important here.
They sent the email to reporters and analysts late Thursday, just in time to write a quick article for Friday's news, but not enough time to write a more in-depth analysis of it. Not to mention getting buried beneath tons of July 4 stories before the weekend editions hit the stand.
Saturday, people are grilling brats n' burgers; Sunday, everybody goes to watch the fireworks; and Monday is the officially observed holiday. Come Tuesday, nobody will talking about it.
It wasn't a publicity stunt; it was sneaky timing to get the story out without much uproar--it's a classic PR trick. It's all about timing the press release, and again, Apple pulled a fast one.
Jon