IBM's Chip Problems Behind iMac Delay


In a third-quarter financial results conference call with analysts and reporters, CFO Peter Oppenheimer broke the news--unusual for Apple, which typically keeps details of its yet-to-ship hardware extremely close to its vest.

"We normally don't talk about unannounced products, but we feel you need to know about the current situation," said Oppenheimer during the call.

Earlier this month, Apple made the just-as-surprising announcement that it was delaying the new systems until September and would run out of inventory before then, missing the lucrative back-to-school selling season.

Oppenheimer blamed the delay on manufacturing problems at IBM, the maker of the G5. "We could not secure the necessary supply of processors" to launch in July or August, he said, adding, "We are extremely unhappy with these events."

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Behind the delay, Apple executives said, was the 90-nanometer technology of the processors and a lower-than-anticipated yield on such chips.

Repeatedly asked if there were other issues with the iMac besides a processor supply problem -- some recent reports have said that the machines have trouble dissipating heat -- Oppenheimer would only say that "processor supply is the most critical factor."

Supply issues at Apple aren't limited to the iMac. Oppenheimer read a litany of various G5 processors that were in short supply, which have made it difficult--in some cases impossible--to ship as many of its higher-end computers as it wanted, and noted that supplies of is popular iPod Mini were so limited that Apple's retail stores were selling out their allotments "within hours or a couple of days."

Oppenheimer did not disclose other details of the iMac and wouldn't commit to a hard date for shipping the new machines.

Oppenheimer said Apple is confident that IBM is throwing the necessary resources at the shortage and believes IBM's claim that it will lick the problem by Apple's first fiscal quarter of 2005.

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