Apple Posts Strong Results, Notes New iMac

 
 
By Daniel Drew Turner  |  Posted 2004-07-15
 
 
 
Apple Computer Inc. is noted for its secrecy around forthcoming products. However, the company on Wednesday offered a peek into the future, with the announcement that the next-generation iMac consumer desktops will be powered by the PowerPC G5 processor, currently used in Apples workstations and servers.

The admission came during the Cupertino, Calif.-based companys third quarter financial results conference call. Chief Financial Officer Peter Oppenheimer said that the next round of iMacs will feature an IBM PowerPC 970 processor, also known as the G5.

Also in the call, the company reported a $61 million net profit for the quarter, more than tripling the $19 million profit for the year-ago quarter, with revenues up 30 percent in the same period, to $2.014 billion.

These results beat the Thomson First Call estimates of $1.94 billion in revenue, and per-share result also topped the First Call prediction by a penny.

"It was an outstanding quarter," said Apple CEO Steve Jobs, "our highest third-quarter revenue in eight years."

Though the extent of Apples profitable quarter came as a mild surprise to analysts, that the normally secretive Apple would let loose information about an unreleased product was more of a shock. Since the return of Jobs to the company he cofounded, product announcements have been reserved as surprises at events such as trade shows. When a small Web site broke the story of the initial iMac in 1998, Apple threatened legal action.

However, in early July, Apple released a statement that it has stopped taking orders for iMacs on its online store until a new, replacement model is 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," the statement read.

For insights on Macintosh coverage around the Web, check out Matthew Rothenbergs Weblog.

In the conference call, Oppenheimer said he could not be specific on dates, other than that the new iMacs would start to ship "sometime" in September.

Oppenheimer did not go into how this could affect educational sales for the iMac, which from its inception has been popular in school settings. September is past the traditional purchasing period for most K-12 schools and universities.

Sales of iMac and eMac models has dropped 15 percent in the just-completed third quarter, to 243,000 units. Oppenheimer did not break out how many of this total were iMacs and how many were eMacs, however. This is down from a peak of 703,000 in the first quarter of 2001.

Read here about Apples recent upgrades to its Power Macintosh G5 desktop line.

Expanding on the situation, Oppenheimer said that the delay in introducing the new iMac was due to a shortage of the PowerPC 970, manufactured by IBM at its Armonk, N.Y. plant. Industry observers have noted that IBMs transition to a 90nm process has been more difficult than the company anticipated; both Intel Corp. and AMD have also seen problems in moving to the smaller chip die size.

However, Oppenheimer stressed that this shortage would not lead to Apple altering its relationship with IBM, as it did with Motorola Inc., which previously supplied processors for Apples desktop and laptop computers.

"The situation is under control," Oppenheimer said. He also dismissed rumors that heat dissipation issues with the PowerPC 970FX contributed to the delay in releasing the new iMac.

The latest consensus of Mac industry insiders is that the company will unveil the new iMacs at its Apple Expo in Paris, which starts August 31.

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