Oppenheimer: iMac Delays Due to G5 Problems at IBM

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,ii Mr. Oppenheimer said. "We believe IBM has placed enormous resources to resolve this situation.ii

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On July 2, Apple said it will be two months late in introducing a newer version of the iMac desktop computer, which are aimed at consumers.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

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