Apple delays Leopard to create the Summer of the iPhone

According to Reuters, Apple has delayed the release of Mac OS X 10.5 "Leopard" until October. Why? Apple said the delay was because it needed software and resources for the iPhone launch, which it confirmed had passed a set of required certification tests and was on schedule for its June release.

Now that's a tough decision to make, but frankly, I think it was a good one. The iPhone is a brand new product in a new industry for Apple. Trying to release two major products in June would have 1) required two simultaneous marketing and PR campaigns and 2) set the two products up to compete with one another. And while Leopard is important, many industry watchers have predicted Apple will fail in the cell phone market, so Apple needs to execute well to keep the good will in its brand. So better to delay one than to release them both at the same time. But which one?

I believe Apple did the math this way: Of the two products, which one is more important to Apple's bottom line this year? Let's see -- the entire software business at Apple is about $1 billion, and Leopard is a fraction of that, maybe $500 million. On the other hand, iPhone should sell somewhere around 2 to 4 million units this year, at an average price of $550, making its revenue potential about $1 to $2 billion alone, not counting any accessory sell-throughs or revenue sharing with Cingular. Sounds like the right decision to me.

This means that the third and fourth calendar quarters are going to be huge for Apple this year. Assuming the company stays true to form, we should see new iPods in September, and a wealth of new products, including Leopard, iWork, professional apps, and new pro laptops by October. What about the summer? That's easy; summer of 2007 is going to be the Summer of the iPhone.


UPDATE: Apple has released an official statement here, and the Wall Street Journal has a subscription-only article with better formatting and newsier writing here.

Technorati Tags: Apple, Cingular, iPhone, Mac OS X, Marketing, Operating Systems, Summer of iPhone