Friday, February 17, 2006, 01:00 pm PT (04:00 pm ET)
Component shortages at root of Intel Mac backlogComponent shortages are to blame for delays associated with Apple Computer's new line of Intel-based Macintosh computers, AppleInsider has learned.
Introduced in January, Apple's iMac Core Duo and 15-inch MacBook Pro computers are the first from the Cupertino-Calif.-based company to be modeled around Intel's architecture and microprocessors. As a result, both systems were designed to include a number of common third-party components — a streamlining method often associated with reduced costs and simplified production.
In the first few weeks the computers have been on the market, Apple has been unable to reap the benefits this strategy, however. With sales of the new iMac Core Duo continuing to exceed the company's own internal forecasts, component supplies originally allocated for use in the manufacturing ramp of the 15-inch MacBook Pro notebook are being used to fill a strong and steady stream of iMac orders, people familiar with the company's operations told AppleInsider. As a result, Apple began the MacBook Pro ramp earlier this week with an almost overwhelming amount of pent-up demand, these people say.
In an effort to compensate MacBook Pro pre-order customers for the delays, Apple this week announced that it would begin shipping the notebooks with faster processors than previously announced — a move that was reportedly planned in advance. However, several customers also saw their estimated ship times for the MacBook Pro extended by a week along with this announcement.
Apple's transition to Macs with Intel processors has been a major concern amongst investors, who've questioned whether the Mac maker will be able to sustain its revenue and unit growth over the next two quarters with a simultaneous drop-off in PowerPC Mac sales and shortage of Intel Macs.
Indeed, documents seen by AppleInsider show that a sample of the company's retail stores in California are off their internal revenue forecast by an average of about 20 percent so far this quarter. However, almost all the locations in the sample remained about 10 percent ahead of internal forecasts for the entire fiscal year.
Whether or not Apple's Intel transition woes will have a material impact on financial results come the close of its second quarter remains up for debate.
"I think it's too early to tell as Apple's quarter ends on March 31, 2006, meaning we are only half way there," one Wall Street analyst told AppleInsider. There are about six week's remaining in the quarter in which Apple will be filling backorders for the iMac Core Duo and pushing the MacBook Pro into its retail stores.
One thing is clear, however, and it's that Apple has generated more interest in its computers by adding Intel processors.
Don Mayer, CEO of Small Dog Electronics, an Apple products retailer, told BusinessWeek the Intel-based iMacs are outselling the PowerPC G5 iMacs by five to one.
"As fast as they are coming in, [iMacs with Intel chips] are going out," Mayer said. "There's significantly more demand for the iMac now that it has the Intel processor."
According to one report that surfaced this week, major manufacturing contractors in the Far East expect Apple to sell as many as 10 million Intel-based Mac systems this year, once all the kinks in the transition are ironed out.
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