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Apple Stops Taking iMac Orders; New Models in September

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%.

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