G5 Supply Delays Still Affecting iMac, Power Mac Sales
TMO Reports - G5 Supply Delays Still Affecting iMac, Power Mac Sales
by , 8:20 PM EDT, October 13th, 2004
Consumers wanting G5-based Macs may have to wait a while as supplies of G5 processors from IBM continue to fall behind demand. In a conference call with Wall Street analysts, Apple said Wednesday that inventories were getting better, but that it didn't expect supply to meet demand until sometime this quarter.
Apple sold 229,000 iMacs during the September quarter, but that number includes an unknown number of both iMac G4 and iMac G5 models. As a result of the lower-than-expected availability of G5 processors, unit sales were down 6% from the previous quarter and 23% from a year ago. Revenue from iMacs was $216 million, down 8% from fiscal Q3 and off 23% from the same quarter in 2003.
Units sold
156,000 G5 Power Mac systems were sold in the quarter, off 10% from the previous quarter and 29% from the same period last year.
In its conference call with analysts for the July quarter, Apple executives warned that supply constraints would be a problem throughout the quarter.
"We are extremely unhappy with these events," Apple's Chief Financial Officer Peter Oppenheimer said at the time. "We believe IBM has placed enormous resources to resolve this situation."
Catching up
During Wednesday's conference call, the company again cited supply constraints from IBM as the reason for these sales declines, but the company also said that the situation was fast improving.
"I'm very encouraged by the progress that IBM has made in this area with Apple's help," said Tim Cook, Apple's Executive Vice President - World Wide Sales and Operations. "In August, we shipped more G5 systems than we did in July and in September we shipped twice as many as the combined total of July and August. That leaves me very encouraged about being able to reach a supply/demand balance at a point during the quarter on every system that we ship with a G5 in it, with the possible exception of the 2.5 GHz Power Mac."
Past problems
IBM production problems with the G5 have plagued Apple's transition to the new processor since its inception. In addition to manufacturing delays leading to a slow rollout of the original Power Mac G5 product line, Apple also had to go for almost three months without its consumer iMac line.
In July of 2004, Apple pulled the iMac G4 from the Apple Store. In a note posted on the Apple Store's home page, Apple said that problems with G5 production had led to the company running out of iMac G4 units before the iMac G5 was ready. That note:
"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."
If IBM does catch up with Apple's demand this quarter, it will mark the first time that Apple has had a steady supply for both of its G5 product lines.
Brad Gibson contributed to this article.
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Observer Comments
Wed Oct 13, 2004 11:38 pm Subject: Oh Yeah - Blame IBM For Unpopular G5s
Sometimes what Apple does not tell you is more revealing than what they do tell you.
Apple is not saying how many orders they have for the G5s and iMacs like they did when the G5 first came out. There is not as much demand as Apple would have you to believe.
Now does the Apple that we all know occasionally stretch the truth just a tad?
IBM has got to taking a big loss on 970 developement. Maybe time to bring back the clones..
Thu Oct 14, 2004 2:29 am Subject:
Apple previously said supply would meet demand around November 15th, I suspect the date will hold up.
Remember too in order for supply to meet demand Apple has to ship into the channel 5 to 6 weeks of inventory. What Apple is saying is the company is filling orders, but until the channel demand is met the company will be air freighting product to the stores and selling just about every iMac the company can make directly to consumers.
QuoteGuest wrote:
Sometimes what Apple does not tell you is more revealing than what they do tell you.
Apple is not saying how many orders they have for the G5s and iMacs like they did when the G5 first came out. There is not as much demand as Apple would have you to believe.
Now does the Apple that we all know occasionally stretch the truth just a tad?
IBM has got to taking a big loss on 970 developement. Maybe time to bring back the clones..
Bringing back clones will not alleviate the G5 chip supply problem. If I recall, Motorolla still made the chips for the clones, and apple provided the OS.
Thu Oct 14, 2004 9:02 am Subject: Yeah and all those stories posted in the press about IBM's
Thu Oct 14, 2004 9:06 am Subject: Sigh...There was a time RC when you at least made an effort.
Everyone and their mother has seen countless stories in the press about IBM's production problems. Yes even many a statement from IBM themselves about this very issue. I myself have seen countless stories on this issue..from inumerable sources.
The iMac G5 came out when a month ago or less.... and still you attempt to crown it a failure based on a month or less sales figures and IBM's own admited production problems.
Please give more effort RC. A good adversary improves my skills. Right now it's like shooting a big fat fish in a tiny barrel. I'm not proud of this obvious victory. Yes you can beat a dead horse..but there is no pride in it. It's the live ones that are tricky:)
"All glory and praise to Allah"
Cleric jim
Hey, wait a minute....Thu Oct 14, 2004 9:20 am Subject: Re: Apple is using IBM as a Scapegoat..
QuoteThat must be why G5 PowerMacs and iMacs are ALWAYS on backorder. It's because there is no demand. That's why whenver refurb G5 Powermacs show up at the Apple Store they are sold out within minutes. Maybe Steve is buying them all himself! It's a big conspiracy. Right. I'd love to hear more of your theories!Guest wrote:
Apple is not saying how many orders they have for the G5s and iMacs like they did when the G5 first came out. There is not as much demand as Apple would have you to believe.
Bad as it is, Motorola was worse. At least IBM is shipping chips. Motorolla kept stringing Apple along with promises and samples but never seemed to come through with faster units in production quantities. At least Apple is able to update hardware now and get some units out the door, even if the sales are backordered for a while. I got my G5 iMac in about 4 weeks.
Yes, at least the chips IBM is shipping are competitive with Intel and AMD'd offerings. Hopefully when supply catches up to demand they will lower the price a tad on the towers, or come out with a cheaper mini tower - $2000 is just too much for an entry level tower (although Apple does turn a big profit on them).
Face facts?
Fact - IBM has acknowledged their problems going to the 90nm chip fab process and this is NOT an excuse by Apple.
Fact - When you add in sales of Apple laptops, sales for Macs are UP.
Fact - Power Mac and iMacs are continually on back order.
Fact - 50% of Mac sales to consumers at Apple's retail stores are to PC owners or first time computer buyers.
Fact - Apple is making gobs of money.
I know two people who went to BUY a G5 PowerMac. But, when they were told that they would have to wait, even for an iMac, they both bought Powerbooks because they were in stock.
Sales of G5 computers would be higher if people could just buy it while they are in the store.
I for one like to try something out before I buy it. And if I walk out of the store without it, I probably won't get it.
Thu Oct 14, 2004 12:18 pm Subject: Re: G5 sales
QuoteAnonymous wrote:
I know two people who went to BUY a G5 PowerMac. But, when they were told that they would have to wait, even for an iMac, they both bought Powerbooks because they were in stock.
Sales of G5 computers would be higher if people could just buy it while they are in the store.
I for one like to try something out before I buy it. And if I walk out of the store without it, I probably won't get it.
Computers are an impulse buy for you?
I ordered a 20" iMac at 6:30 AM the day they were announced and have had it for a while. I didn't have to think too hard to realize that supply of G5 chips would be a problem, and that demand would be high. The longer you wait to order the longer you wait to receive.
The key to the iMac is that Apple is going to sell every one they make - something a lot of computer companies would kill for - and people who want one for the holidays had better not wait too long.
When the supply problems of the G5 chips are resolved the iMac is going to be a huge seller.
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