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Production problems delay Apple's new iMac

A visitor at the Apple Expo looks at the new iMac G5, a system that features a G5 processor and a new design that integrates the entire computer right into the flat-panel display, in Paris on Tuesday. The new iMac G5 systems are expected to begin shipping later this month. PHOTO: AP

Apple Computer on Tuesday introduced an updated version of its iMac home computer with a minimalist, all-in-one system that hides the computer's internal components inside a flat-panel LCD display.

The new computer, housed in a luminescent white plastic case, replaces the current iMac, which has a separate screen and processing unit and has been affectionately dubbed the "iLamp" by Apple fans.

The prices for the new iMac line will start at US$1,299 for the 17-inch model. The slightly thicker 20-inch model will cost US$1,899.

Whatever consumers' response to the radically new design, the company's challenge may be one of market timing. Apple had hoped to bring the new iMac out during the summer, in time for the back-to-school home computer buying season. But the product has been delayed by production problems at IBM, Apple's manufacturing partner, which provides the computer's G5 microprocessor chip. The new computers will not be available in stores until the middle of this month.

Apple executives on Tuesday acknowledged the possibility that the delay would cost them some sales, but sought to play down the impact.

"During the past six years we have sold 7.5 million iMacs," said Greg Joswiak, Apple's vice president of hardware marketing. "What are a few days between friends?"

And analysts noted that the trend among high school and college students to use portable computers, of which Apple has had a ready supply, means that Apple has not necessarily missed big portions of the back-to-school market.

"The iBook and the PowerBook are doing really well in education," said Charles Wolf, a computer industry analyst at the investment firm Needham & Co. "The real important issue was they had to have the iMac for the Christmas holiday market, and they made that easily."

Wolf said strength in the company's notebook product line, as well as its consumer iPod music player, has Apple on track for revenue of about US$2.85 billion during its fourth quarter, which ends Sept. 30. Revenue for the comparable quarter last year was US$1.71 billion.

The continuing shortage of G5 chips has not only delayed the introduction of the new consumer iMac, but has also limited Apple's sales of powerful dual-G5 desktop computers that are its most profitable products, priced at US$2,999 and up.

Although dual-G5 machines are available, some customers are waiting for the new model.

Apple's head of design, Jonathan Ive, described how the company had struggled to fit all of the components of the computer into the display case, while keeping fan noise minimal.

He said that the goal had been to redesign the system to make it appear extremely simple. The result is a display screen that balances on a thin metal stand, and that can function with only a single power cord.

"You're left with a solution that is so essential and so inevitable that it seems like it wasn't designed," he boasted.
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