Analysts not concerned by Leopard delay

Mac users may be frustrated by the delayed release of Mac OS X 10.5, but tech-industry analysts say an October release date for the next major OS X update is nothing to get alarmed about—especially if it helps get the high-profile iPhone out the door on time.

Apple announced Thursday that it was moving OS X 10.5’s release back to October. The OS X update, code-named Leopard, has previously been slated for a spring 2007 release. In announcing the delay, Apple cited the need to shift software engineering resources to its iPhone mobile device, which is scheduled to ship in June.

Reaction to the Leopard delay among Mac users on Macworld’s forums was a mix of disappointment and frustration. “I guess mainstream consumer toys are more important than the ad agencies, design firms, print houses, etc. that actually helped Apple become who they are,” posted one forum user.

But that disappointment, while understandable, may be misplaced, according to tech industry analysts. “A delay in an operating system is not much to worry about,” said Tim Bajarin, president of Creative Strategies, a high-tech consulting firm. “If they were a year late, I’d be concerned, but not a few months.”

Rather, analysts were cheered by the news that the iPhone appears to be on track, and that Apple is committed to delivering that mobile device in June. A phone that also doubles as an iPod and an Internet communications device, the iPhone potentially reaches customers beyond Apple’s core base of Mac users. That, coupled with the fact that AT&T is involved with the iPhone as a service provider, makes it much more critical for Apple to meet the June ship date.

“I think that one issue we may not be aware of are the contract terms between Apple and AT&T,” said Ross Rubin, director of industry analysis at The NPD Group. “Apple may have committed to delivering the phone at a certain time creating a legal liability if they don’t deliver, which might explain the shifting of resources.”

The Leopard delay is the first significant delay in Apple’s operating systems since it replaced OS 9 in 2001. However, it is the second high-profile product delay in 2007 for Apple; the release of Apple TV slipped a few weeks from February to mid-March.

Still analysts remain convinced that getting the iPhone on the market makes more sense for the company than pouring its resources into the Leopard. “Apple has a lot of good things going on right now,” Bajarin said.

However, one potential consequence from the delay could be investor ire. Consumers are likely to forgive Apple for small delays in product strategies; Wall Street can be less understanding.

“Investors may say, ‘Wow, these guys aren’t bulletproof and they do make mistakes,’” said Roger Kay, president of market research firm Endpoint Technologies Associates. “This could cause a revaluation of the stock, but it shouldn’t hurt [Apple] long term.”

Kay also believes that Apple’s tight-lipped ways that help the company generate excitement for product announcements when things are going well may have a negative effect in situations like this.

“The cult of secrecy hurts them a little bit here,” Kay said. “People are wondering what else they are hiding, what else don’t we know.”

Overall, all of the analysts agree that the delay won’t hurt Apple in the long term financially. In fact, Creative’s Bajarin said the company could be better positioned by a Leopard postponement if it means a successful iPhone launch.

All of the analysts also agree that Apple is making good moves by branching out into different markets like television and cell phones instead of sticking to its traditional computing business.

“The iPhone is an ambitious product, and they need to differentiate from a host of companies that have deep roots in this space,” said Rubin.

Subscribe to the Best of Macworld Newsletter

Comments