‘Worse than anticipated’ G5 chip delay may impact Apple earnings

“Prudential Equity Group said the availability of chips for Apple Computer could be ‘worse than anticipated’ due to manufacturing delays from IBM. ‘Following a series of recent checks on Apple, we believe that availability of the company’s 1.8 GHz and 2.0 GHz G5 processors may be worse than initially anticipated,’ it said. ‘Apple had previously stated that it expected to have shortages of its 1.8 GHz and 2.0 GHz processors through July, with supply catching up in August. We now believe that IBM may be having difficulty meeting its revised supply commitments.'” Forbes reports.

Full article here.

MacDailyNews Take: Great. If Apple could ever manage to secure a competent CPU supplier, the sky would be the limit – instead of 2.5GHz. Yeah, yeah, we know – patience, patience… sigh.

40 Comments

  1. “Great. If Apple could ever manage to secure a competent CPU supplier, the sky would be the limit”

    Maybe Apple shouldn’t keep telling customers one thing, when supply is not in their control.

    There are probably alot of schools and businesses right now who are being told “If you could ever manage to secure a competent computer supplier, the sky would be the limit”. So keep blaming IBM for the promises Apple makes. Whether it’s IBM, Motorola or whoever that is dropping the ball, Apple needs to learn that they can’t take orders for units when they can’t be sure when they will even hit the assembly line.

  2. Dude, look at the source of the information: Prudential. They have been the only analyst to not back off the negative rhetoric. This report is pure conjecture and couched in speculation. No facts. Now look at the Apple Store: Apple reduced the wait time for a 2.5 G5 from 5-6 weeks to 2-3 weeks. and the others are shipping right away. Those are the facts.

    Prudential has been caught short, there is no other reason for this crappy report.

  3. I don’t remember anyone at Apple saying the chips would be in plentiful supply in August. They said chips would still be constrained through the end of the year. Indeed IBM is having problems…. but Prudential is making an assumption based on something that was never said. Check out the last Quicktime conference call. However, it surely will be a problem with the new G5 iMac. Don’t expect enough units to sell through the end of the year. Apple makes its profits nowadays on the laptop and iPod lines. Everything else is “gravy”.

  4. I agree with pkradd. This doesn’t hurt Apple’s bottom line too badly because they sell plenty enough PowerBooks, iBooks and iPods to keep the revenue flowing in. I just hope that this IBM supply problem doesn’t become chronic however as it’s already extended longer than was initially anticipated. I still have more faith in IBM than I ever did in Moto though.

  5. As a mac user I’m used to the notion that anything Apple announces these days is unavailable for several months. Who cares wether the lack of available products is Apples fault or their suppliers – either way it’s piss poor.

  6. Sad!

    There is an abundant supply of x86 processors out there. 🙁

    Not trolling or anything, but I wonder how fast OSX would run on a nicely set up Windows-spec’d box. It almost seems a given that it could run faster than Windows itself.

    —-

    Apple is paying the price for having a sole proc supplier. Sure every CPU maker is going through a bit of growing pains, but AMD and Intel are delivering much higher numbers than IBM is putting out in the G5 line.

    In such a competitive industry, you’re extremely lucky to make a huge blunder, then say “we’ll get em next time”… AND still be in business in a year.

    Here’s a what if:

    What if Apple didn’t come up with the iPod? How viable a company would it be with all the G5 snafus?

  7. Sad!

    There is an abundant supply of x86 processors out there. 🙁

    Not trolling or anything, but I wonder how fast OSX would run on a nicely set up Windows-spec’d box. It almost seems a given that it could run faster than Windows itself.

    —-

    Apple is paying the price for having a sole proc supplier. Sure every CPU maker is going through a bit of growing pains, but AMD and Intel are delivering much higher numbers than IBM is putting out in the G5 line.

    In such a competitive industry, you’re extremely lucky to make a huge blunder, then say “we’ll get em next time”… AND still be in business in a year.

    Here’s a what if:

    What if Apple didn’t come up with the iPod? How viable a company would it be with all the G5 snafus?

  8. hmm.. AMD and Intel – TWO companies.

    hmm… Apple gets their processors from Motorola and IBM – TWO companies. Yet, they only have 5% market share.

    Considering how many more pentium compatible chips are being made, isn’t it more remarkable that on the PC side there are only TWO chip makers.

    Last, how can Apple have more than one or even two chip supplier? Look at their order quantity!! Who would devote so many resources to relatively small production runs? Please think before you post things like that. It makes absolutely no sense whatsoever. If your original order is small, you are already happy that IBM is committing so much to the architecture. And gladder still that it’s part of their Power PC strategy.

    “What if Apple didn’t come up with the iPod?”

    Well, the iPod could just as well have been a disaster, but it was not. Apple did it right, it took a few years, and they also got lucky in time and place. Luck swings both ways, good and bad, and now the G5’s are going through the bad. They did not foresee it just as they did not foresee the good with the iPod.

    Twenty-twenty hindsight, people, but please think before you post. If everyone knew the future, there would be no future.

    Last, the reason there are abundant supplies of x86 out there is because most of them are old technology! Only very few makers are able to use the latest processors because of the same problem with production. Apple only has two or three processor models and speeds. On the PC side, there’s dozens. How is that any measure of comparison with the G5’s? It’s like complaining that Ford and GM are cranking out so many of these cars every day, they are plentiful and cheap, yet Mercedes makes so few, and Ferrari even fewer.

    Think, think, think!

  9. What if Apple didn’t come up with the iPod? How viable a company would it be with all the G5 snafus?

    ~~~~~

    Well you’re asking a stupid question.. Apple has focused MUCH of its energy on the iTMS and the iPod these past 18 months.. to say.. what if they didn’t do that.. obviously they would be plugging something else..

    all this heresay and conjecture..

    what if MS never came out with Office.. hummm good question..

  10. The chips in question, 1.8 and 2.0 GHz speeds, are both 130nm fabricated. IBM has indicated in their 10Q reports that 130nm fabrication processes are at or above expected yield levels. The 90nm fabrication process that produces the 970FX has been below expected results. Thus, PowerMac shortages are unlikely.
    If the new iMac design is based on the 90nm chip, with 3 models competing for the same yields, deliveries may be constrained. When confronted with an uncertainty as such, investment companies, and notably insurance-based investment companies, tend to be conservative. Prudential doesn’t know what IBM’s 90nm yields are, but even if the yields are good, they may not keep up with demand for a new and potentially very popular iMac.

  11. This the best though from the bottom of a press release about this new launch

    “The company previously issued third quarter 2004 financial guidance estimating a GAAP net loss between ($0.03) and ($0.04) per share. The company estimates the Freedom of Choice campaign may negatively impact projected third quarter net earnings by up to ($0.01) per share. As a result, today the company is issuing a revised estimate for third quarter 2004 GAAP net loss of between ($0.03) and ($0.05) per share. Excluding antitrust expenses, the company estimates a net loss of between ($0.01) and ($0.03) per share for the third quarter of 2004. The company remains committed to achieving quarterly profitability, excluding antitrust litigation expenses, by the end of 2004.”

    Bye Bye Real!

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