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iMac Shortages Piquing Wall Street Analysts' Interest

by , 1:30 PM EST, March 19th, 2002

Apple's reported iMac shortages are starting to raise some, but not all, eyebrows on Wall Street. C|Net has published a story quoting a Prudential Securities analyst as citing Apple's iMac supply problems as an area of concern. The analyst also refers to other product rollout problems Apple has faced. From the article:

In a research report previewing earnings for the leading PC companies, Prudential Securities analyst Kimberly Alexy became the latest analyst to flag potential problems for Apple's quarter ending March 31.

"Although demand for Apple's new iMac product remains strong, we are concerned about the company's ongoing inability to execute new product ramps efficiently," she said.

The new iMac was trotted out with great fanfare in January, but Apple has not been able to ship large numbers of the PCs because of a shortage of flat-panel displays, among other issues. As a result, a fairly lengthy waiting list of consumers and dealers for the new PC has emerged, with some dealers telling customers they may not have iMacs for five to 20 weeks.

The article also says that Wall Street sees a hard 2nd quarter, the March quarter, for the company, but that the June quarter should be on the receiving end of the delayed shipments. From the article:

In a recent research note, Lehman Brothers analyst Dan Niles said he was satisfied that Apple has corrected its supply problems.

Niles also said he sees a challenging quarter for Apple, but he expects plenty of the new iMacs to be available for the June quarter, which will help the company, "assuming the demand is there."

There is additional information in the full article that we did not quote, and we recommend it for people interested in this issue. For those wishing to discuss this issue, we have a forum topic dedicated to the subject in our Apple Finance Board.

The Mac Observer Spin:

Let us translate that last comment from Dan Niles: iMac shipments are being delayed now, and that means that they will ship in the June quarter. So, all that money Apple should have gotten now will be received a bit later instead. We are NOT trying to defend Apple's supply problems, but shifting a bunch of sales from one quarter to the next because of supply problems is not all that much of a bad thing.

It's interesting to note that Mr. Niles, an analyst who truly seems to understand Apple, and has the ability to contextualize the company within the PC industry, is much more upbeat than Kimberly Alexy. Ms. Alexy's take is that Apple can't seem to do a product rollout correctly, while Mr. Niles has more of a "Hey, it was a problem, it's fixed, so what?" feel to his comments. We aren't faulting Ms. Alexy; after all, Apple has in fact botched several product rollouts, but the company has not suffered too much from those issues in the process. For instance, we have seen no evidence of order cancellations due to the iMac delays. That said, we do indeed hope that Apple can get this problem fixed sooner, rather than later, if it is not already fixed.

Another interesting tidbit from the article is this:

Steve Jobs will speak at Macworld Tokyo later this week and, if history is any indication, he will likely address the issue.

We aren't sure to which history the author of the report is referring, but in our experience, his Steveness seldom mentions problems Apple is facing (or has faced) unless the solution is at hand.

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