In the push to get the iPhone out on time, Apple has been forced to delay the release of the next version of Mac OS X until October.
The company revealed the scheduling slip in a press release after the close of the stock market Thursday. The iPhone is still on track for a June release--around the time of Apple's Worldwide Developers Conference--but engineers and quality assurance staffers working on Leopard needed to switch projects to ensure the iPhone arrives as planned, Apple said.
As a result, Leopard will not be ready this spring, a time frame that Apple had reiterated several times over the past few months. A "near final" version of the operating system--Mac OS X 10.5--will be distributed to developers at WWDC for testing. The final release will be available in October.
"Life often presents tradeoffs, and in this case we're sure we've made the right ones," Apple said in its press release.
An Apple representative declined to provide more details on the delay, beyond what was included in the statement.
Wall Street reacted immediately, sending Apple's stock down a little more than 2 percent in after-hours trading. "They've shaken people's confidence in their ability to execute," said Roger Kay, an analyst with Endpoint Technologies Associates.
Apple was also forced to delay its Apple TV product in February, although it didn't specify a reason at the time. Apple TV was released in March.
For once, the rumor mill was right on this delay--though it missed on why that would be. Last month, Digitimes correctly reported that Apple was planning to delay the operating system release until October, but it said the reason was that Apple needed more time to make its Boot Camp software compatible with Windows Vista.
However, analysts downplayed that report, and Apple shortly thereafter released a version of Boot Camp that was compatible with Vista. Boot Camp, which lets users of Intel Macs boot Windows on their systems, will be integrated into Leopard when it ships.
Apple CEO Steve Jobs previewed Leopard at last year's WWDC, showing off several features such as the Time Machine backup software and Core Animation, which lets developers create new types of sophisticated applications.
The company has said all along that Leopard would be a spring 2007 product, but Apple and Apple watchers have been obsessed with the iPhone since Jobs unveiled it in January at Macworld.
Apple's statement announcing the Leopard delay led off by re-emphasizing that the iPhone is expected to ship in late June. Leopard isn't mentioned until halfway through.
"However, iPhone contains the most sophisticated software ever shipped on a mobile device, and finishing it on time has not come without a price--we had to borrow some key software engineering and (quality assurance) resources from our Mac OS X team, and as a result we will not be able to release Leopard at our Worldwide Developers Conference in early June as planned," it said.
The delay is unlikely to make a huge impact on Mac shipments, according to Kay. Apple won't see any revenue from Leopard in the third quarter, but revenue from the iPhone should offset that, he said.
But Apple will be missing the back-to-school season, which is the second-most important period of the PC buying year, said Samir Bhavnani, an analyst with Current Analysis. The company might consider offering a coupon for an upgrade to Leopard along with purchases of Macs in August and September--similar to what Windows PC companies did when confronted with Vista's delay past the 2006 holiday shopping season, he said.
It seems that Apple was forced to make a choice between shipping the iPhone on time or releasing Leopard on schedule, Bhavnani said. "The iPhone is the priority over Leopard. They still feel they'll be able to sell the PCs (between now and October), but right now Apple can't sell a phone," he said.
Any delay in the iPhone shipment date would also give competitors more time to launch their own touch-screen smart phones--some of which are already in development, like Samsung's Ultra Smart F700.
Aside from the iPhone, however, there's some evidence that Leopard might have been more buggy than Apple is letting on. AppleInsider reported Thursday that the latest version of Leopard distributed to developers for testing actually had more bugs than the previous version distributed in March. "Critical" bugs were reported with the installer, QuickTime and graphics hardware, the site said.
But the iPhone is looming over everything Apple-related at the moment. Jobs considered the iPhone such an important launch that he used the occasion to also announce that Apple was dropping the "Computer" from its official name; it's now known simply as Apple Inc.
"Apple is a consumer electronics company," Bhavnani said. This isn't necessarily a bad thing--iPods are quite profitable and the iPhone has generated almost unprecedented buzz--but it is a change in Apple's priorities, he said.
The Apple community appeared to be disappointed with the delay, but resigned to the fact that a late Leopard is better than a problematic Leopard. "This is bad news, but I, and most developers I know, have been expecting it, based on the very buggy nature of the current 10.5 seeds," wrote John Gruber on Daring Fireball, his Apple-oriented blog. "Apple's choice was to either push back the release a few months or ship a very, very buggy 10.5.0."
David Chartier of The Unofficial Apple Weblog echoed those sentiments, writing, "I also agree that I would rather have it this way than a craptastic release in June that's full of more holes than Swiss cheese."