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Oppenheimer: iMac Delays Due to G5 Problems at IBM

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On July 2, Apple said it will be two months late in introducing a newer version of the iMac desktop computer, which are aimed at consumers.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

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Close Name:Guest
Subject: Cat's out of the bag

Poor Mr. Oppenheimer. He will be CFO of the local Wendys if he keeps let things like THE NEW IMAC HAS A FRIGGING G5 IN IT out in mixed conversation.

Close Name:Guest
Subject: Stating the Obvious

In most cases you'd be right, but in this case he's not saying anything. No new processors would never have caused a delay in the old iMacs, since you could keep making the old model indefinitely (and as Apple has often done in the past). The only reason for the delay is if the entire enclosure of the computer was changing, and Apple only has done that for major product line revisions. Yeah, a few times they're made an enclosure shift with the same processor (B&W G3, iBook 500, and to a lesser extent, the "Kifei" iMacs), for the most part an enclosure shift means a shift to a new processor. In addition, with the advent of the G5 and the well-known travails of the G4, and the simple fact that Hz for Hz, the G5 is CHEAPER, it's well known that Apple wants to move the G5 across the entire product line ASAP and get the hell away from the G4.

So while it seems like he's giving away a lot, this is nothing that wasn't blatantly obvious as soon as there was a major delay in getting new iMacs out. To be honest, he really hasn't given anything away, it just seems like it.

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: More RDF Spin - Apple R&D To Blame, Not IBM
Close Name:kenaustus Posts: 602 Joined: 27 Jun 2003
Subject: Not quite RC

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.

Close Name:Kircle Posts: 271 Joined: 06 May 2004
Subject:

Actually, I find this RC post quite humorous. "Apple R&D failure" and "demanded by his Stevieness." Gave me quite a chuckle.

Close Name:jhonka Posts: 77 Joined: 05 Sep 2003
Subject:

Quote
RealityCheck 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.

Close Name:Guest
Subject: AppleInsider

The posts about Apple being to blame for a late shipping iMac and not IBM's and the assertion that a rumor site like AppleInsider has "the facts" simply sounds juvinal in thinking.

If Apple is indeed putting blame squarely on IBM when it is NOT IBM's fault, you can bet IBM will staunchly defend their processor division and point the finger right back at Apple.

However, IBM will not do so, which shows they are indeed the problem children at the moment.

If you still do not believe this, a few months back, even Dr. John E. Kelly III, the Sr. Vice President - Technology Group - IBM satated the yeilds were low, and problems arose that were not expected.

How this is Apple fault is pure FUD and speculation which cannot be substantiated by any of the companies involved.

Close Name:Guest
Subject: Another secret transcript

SJ: Um Pete, I think I heard you say in the conference call that the new iMac has a G5 in it.

PO: Yeah, I read it on ThinkSecret. Was I wrong?

SJ: Pete, this is why you're not in the loop. Look, when Fred retired, we gave you a nice parking spot, leased you one of those BMWs we had to return when we shorted out the steering wheel, and gave you a Flower Power iMac so you could run MYOB on it. We don't ask for much, just cook the books enough to make investors think we have a few gigabucks in the bank and (fist pounding) DON'T SPILL OUR SECRETS DURING CONFERENCE CALLS.

PO: But Mr. Jobs...

SJ: Avie, we really need that new MacInTalk. Can you have it ready by next quarter's conference call? Would it be possible to get a sample of Pete's voice now. I think we need to terminate him before he ruins the rest of our plans. Did anyone tell him about the iPod phone we're doing for Verizon?

PO: Really? I"d love to have one of those. Any chance you can add a calculator to it so I can consolidate these three device holsters on my belt? Um wait, Mr. Jobs, did you say "terminated"? I have a wife, kids, and a dog to feed. All the good accounting jobs have been outsourced to India. I'm really sorry about that, but we needed to explain why we aren't going to have $500 million in iMac revenue this quarter.

SJ: It's OK Pete, you're not losing your job, just your life.

AT (whispering): Steve, this could be difficult to cover up, with his dog and all. I know his wife and kids don't recognize him from the long hours he spends here, but dogs aren't so easily fooled. We found the iPod problem that shorted out all those BMW steeriing wheels. I think we can tweek it a little and deactivate the brakes.

SJ: Okey dokey Avie. This is in your hands. Pete, we won't terminate you this time, but we can't have any more slip ups.

PO: Thanks Mr. Jobs, you are a very fair man. Is there something I can do to make it up to you?

SJ: Yeah, my friend John called and his campaign needs a couple hundred million on its balance sheet so we can make sure Bush steal another election so he can hire more terrorists to boost Haliburton profits.

AG: (dragging on a cigarette like the Smoking Man in XFiled): We cannot let that happen again!

SJ: I know Al.

Close Name:Guest
Subject:

Quote
RealityCheck wrote:
Nice try Apple, blaming IBM for poor yields, when it's actually a miserable Apple R&D failure.


Apple were wrong about Motorola but now this is IBM's inability to deliver better-than-the-competition goods.


Quote
RealityCheck wrote:

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.


I just know that Apple is on the rise while Intel/Gateway/Dell et al are on decline. "Market share" or not Apple is here to stay for many year to come.

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject: Thanks RC.

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!

Close Name:Photodan -   TMO Staff Posts: 3112 Joined: 11 Jun 2001
Subject:

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

Close Name:Guest
Subject:

it's really hard to concentrate on all this discussion when you start thinking of how awesome this computer is going to be. im going to pee my pants when it's announced

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