Apple, Focused on IPhone, Delays Macintosh Software (

[David Farber <dave () farber net>]

Begin forwarded message:

From: "CONNIE GUGLIELMO, BLOOMBERG/ NEWSROOM:"  
<cguglielmo1 () bloomberg net>
Date: April 12, 2007 8:22:48 PM EDT
To: dave () farber net
Subject: (BN ) Apple, Focused on IPhone, Delays Macintosh Software (


Apple, Focused on IPhone, Delays Macintosh Software (Update4)
2007-04-12 20:22 (New York)


     (Adds analyst's comments in ninth, last paragraphs.)

By Connie Guglielmo
     April 12 (Bloomberg) -- Apple Inc. delayed the release of
its new Macintosh system software after shifting engineering
resources to ensure the iPhone makes its debut in June.
     The stock fell 3.2 percent in late trading after Apple said
Leopard, an update to its Mac operating system, will be pushed
back to October instead of June. The iPhone handset will ship in
late June in the U.S., Apple said in a statement today.
     ``IPhone contains the most sophisticated software ever
shipped on a mobile device, and finishing it on time has not come
without a price,'' Cupertino, California-based Apple said in the
statement. ``Life often presents trade-offs and in this case
we're sure we've made the right ones.''
     Chief Executive Officer Steve Jobs in January unveiled the
iPhone, which combines the best-selling iPod music and video
player with an Internet-connected mobile phone. Apple developed
new software to handle the device's touch screen. Jobs expects to
sell 10 million iPhones in 2008, capturing 1 percent of the
mobile-phone market.
     ``They had to make a choice and one of them was going to
slip,'' said Jonathan Hoopes at ThinkEquity Partners in New York.
He has a ``buy'' rating on the shares and doesn't own any. ``They
made the right choice.''
     Shares of Apple fell as much as $2.94 to $89.25 in extended
trading. They earlier dropped 40 cents to $92.19 at 4 p.m. in
Nasdaq Stock Market trading. The stock has gained 8.7 percent
this year.

                          Test Program

     With the iPhone, Jobs is working to extend Apple's dominance
in the digital media market into the larger mobile-phone arena,
which is expected to reach 1 billion devices next year. The
company said this month that it has sold 100 million iPods in the
5 1/2 years since Jobs unveiled the device. That's made it the
best-selling media player in the U.S.
     Apple plans to release two versions of the iPhone, a $499
model with 4 gigabytes of memory and a $599 8-gigabyte model. The
devices will be released in Europe later this year and in Asia
next year, the company said.
     The company may sell 850,000 iPhones this fiscal year, which
ends in September, UBS AG analyst Benjamin Reitzes said in a
report today. He rates the shares ``buy'' and doesn't own them.
     Apple promised today to deliver ``a near final version'' of
Leopard at its developers' conference June 11 in San Francisco.
Attendees will be able to take home a test ``beta'' version of
the software, company spokesman Steve Dowling said.
     ``The features will be complete in the beta version,''
Dowling said.

                          Leopard Sales

     Sales of Leopard may reach $50 million to $75 million a
quarter and add up to 5 cents a share to earnings, Citigroup
analyst Richard Gardner said in an April 9 report. Gardner, based
in San Francisco, has a ``buy'' rating on the shares and doesn't
own them.
     Leopard is the sixth major version of the company's OS X
software, which first began shipping in March 2001. Apple made OS
X the standard software included on all Macs in January 2002. The
most recent version, called Tiger, was released in April 2005.
     Sales of software account for about 6 percent of Apple's
revenue, or $1.1 billion, said Reitzes, who's based in New York.
While upgrades of OS X account for a ``fraction'' of software
revenue, the Leopard delay could cost Apple 3 cents to 4 cents a
share in each of the next two quarters, he said.

--With reporting by Ian King in San Francisco. Editor: Sondag
(cma/nht)

Story illustration: To view a graph of the company's stock
performance, click on {AAPL US <Equity> GP <GO>}.

To contact the reporter on this story:
Connie Guglielmo in San Francisco at +1-415-743-3582 or
cguglielmo1 () bloomberg net

To contact the editor responsible for this story:
Cesca Antonelli at +1-202-624-1949 or fantonelli () bloomberg net

[TAGINFO]



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#<551666.4326980.1.0.34.28824.25>#
-0- Apr/13/2007 00:22 GMT


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