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TMO Reports - Oppenheimer: iMac Delays Due to G5 Problems at IBM
by , 8:20 PM EDT, July 14th, 2004
After admitting July 2 that it had blown the timing of a new consumer iMac model release, an Apple executive said Wednesday the delay in launching the new model was due in large part to delays in getting adequate supplies of the Power PC G5 processor needed for the new consumer desktop from IBM.
Apple Chief Financial Officer Peter Oppenheimer revealed during a quarterly earnings conference call with analysts that the new iMac that will begin shipping in September will be powered by the PowerPC G5 processor, but that an IBM chip shortage was behind the delay of the new consumer Apple desktop not being released sooner.
Mr. Oppenheimer said the switch to 90 nanometer scale technology production had not been as smooth as IBM had expected. He did say that IBM had made progress in working out those issues and that he felt confident there would be no more delays in shipping the new iMac models in September.
"We are extremely unhappy with these events,'' Mr. Oppenheimer said. "We believe IBM has placed enormous resources to resolve this situation.''
But when asked if unforseen problems don't get resolved in time to ship the new iMac, Mr. Oppenheimer said fourth-quarter results for Apple might have to change. At present, Apple expects to post fourth-quarter revenues of $2.1 billion and earnings per share of 16 cents to 17 cents, including 1 cent per share in restructuring charges. That forecast is largely in line with current consensus Wall Street estimates of 17 cents a share on revenue of $2.04 billion.
On July 2, Apple said it will be two months late in introducing a newer version of the iMac desktop computer, which are aimed at consumers. Apple has stopped taking orders for the current version and said it expects to run out of iMacs this month.
An IBM spokesman was not immediately available for comment.
Observer Comments
Wed Jul 14, 2004 10:02 pm Subject: More RDF Spin - Apple R&D To Blame, Not IBM
Gee Rod, opps, sorry, RC, didn't you read press releases by IBM, not Apple - IBM, that there was a problem in producing the 90 nm chips. People who have been reading the news have known this since January. I'll admit it is January of 2004, but still January.
Someone should also have told you that the SEC would put Apple in the dog house if they lied about this during the release of financial results. Think about that a bit if it isn't too complicated for you.
If you had listened to the results you would have known that there will be an adjustment to this quarters gross profit margin due to the expense of air freighting the iMacs when they come off the production line in September. That is another good indication of the situation being as Apple stated.
All in all your hatred of Apple has gotten in the way in your post above - let you down this time, it did.
QuoteRealityCheck wrote:
Nice try Apple, blaming IBM for poor yields, when it's actually a miserable Apple R&D failure. The truth is that the G5 was simply too hot for the new artsy iMac design demanded by his Stevieness.
Check the facts:
http://www.appleinsider.com/article.php?id=550
You just know the new G5 iMac will ship late and be priced out of reach for the consumer market, and Apple will lose even more market share.
Nevermind the fact that AppleInsider is a rumor site and is often off the mark (e.g. the alleged photos from a new G5 service manual which were incorrect). Now if that came form Think Secret, then I might believe you. They seem to be the most accurate of all the rumor sites.
RC was nice enough to point out the other popular rumor about the iMac delay. It's about time he actually contributed to a discussion! The important thing to note about the AI story is that its tied to a supposed design of the new iMac. I suggest reading through the forums on that story. That design doesn't seem very smart. Perhaps they are trying to throw people off? Only time will tell!
IBM would not be taking this blame if it weren't at fault.
There's a problem with "insiders" who furnish leaks like that. They generally don't know exactly what they are looking at. The more likely situation is that they probably tried the new design with the current chips in some test units (as a contingency) after finding out about the delays in the 90nm G5s and found they were too hot. This is most likely what the "insider" saw.
Given the fact that the release dates of the lower-heat 90nm G5s and the new iMacs correspond, it's most likely Apple planned to use them from the outset. If you are missing a vital part, you certainly can't make the product.
-Dan
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