In a way, the iPhone was a godsend for Apple.
Not just because its revolutionary multi-touch technology boosted Apple’s already stratospheric cool factor. Because it did.
And not because it gave Apple an important step into yet another major market. Because it did that too.
But because back in April 2007, the iPhone’s upcoming June 29th release date gave Apple a much-needed excuse for delaying OS X Leopard.
Do the math…
OS X Leopard’s release was originally scheduled for the end of 2006 or early 2007. A year later, this was amended to “Spring 2007″.
And as of March 23rd, Leopard was still supposedly on track for a spring release.
Then on April 12, just 20 days later, Apple announced that Leopard would be delayed. The reason? Apple needed to “borrow some key software engineering and QA resources” and put them to work on the iPhone in order to meet that product’s promised June release.
But does that make sense? Apple could easily upgrade millions of users to Leopard at $129 each, or more for a $199 “family” pack. And while not a huge market, there were even plenty of OS X Server licenses to sell at $500 a pop.
All at a cost of maybe $5/box.
Potential iPhone sales, however, could only be estimated. Apple wanted to sell a million the first year, but “wants” don’t always translate into actual sales.
What if it wasn’t a hit?
And while a million units at $600 each multiplies nicely, that’s sales, not revenue, as an iPhone costs just a little more than $5 in parts and packaging.
Not to mention the fact that people were waiting for Leopard.
In fact, quite a few were deferring hardware purchases, not wanting to pay first for a computer and then again for an OS upgrade.
Sales and profits on a $600 phone are one thing. Sales and profits on a $2,000 iMac or MacBook Pro are quite another.
So why defer that much revenue and incur that much risk?
Unless you simply have no choice.
Why delay at all?
Why? Because Leopard wasn’t ready to ship. In fact, many developers seeded with early copies reported that Leopard was “beta” quality at best. Crashes were common, the list of bugs long, and many announced features had yet to appear in their final form. Or at all.
There was no way it could be released that spring.
Apple was going to have to announce another delay.
But Apple had taken too many pot-shots at Microsoft and Windows Vista. Done too many inside jokes at the missed schedules and repeated delays and Vista’s ever shrinking feature list.
Simply put, they’d cast too many stones. Do the same, and the industry press would have a field day. Apple’s stock would take a hit, perhaps a significant one.
Apple had to delay Leopard. And spin it in a positive way. But how?
The iPhone gave them the answer. And the excuse.
Run those dates again…
On April 12 Apple stated that they need to use some of the OS X developers to meet iPhone’s June 29th release date. That’s 78 days, or 2.5 man-months per person pulled out of the OS X schedule.
But the revised release date for Leopard was October 26th, 119 days after the day the iPhone would ship and those “borrowed” developers could return to work on 10.5. Four months put back into the timeline, not two.
If Leopard has been trotting along as planned, why add two more months and miss your final quarter?
And in actuality the postponement gave Apple over six more months of Leopard development time, counted from the announcement on April 12th to the revised ship date on October 26th.
Apple had only borrowed a few key people, remember? Presumably the rest weren’t just sitting around waiting for the others to get back to work.
The iPhone shipped, selling 270,000 units in first two days.
This equates to about $150 million, as many took the 4GB version when the stores ran out of the 8GB version. Respectable. But take out COGS and you’re left with $80M, or about a third of the profits Apple could have made shipping Leopard. (Probably more like a quarter if one counts deferred hardware sales.)
In fact, this impacts our earlier sales projections, as Apple knew exactly how many phones it was planning on stuffing down the pipeline.
Months passed, developers spent sleepless nights chasing infinite loops, and as the October date loomed Apple faced the same exact questions. Again.
Should we delay or ship? Can we risk damping holiday hardware sales? Will we take a stock hit?
What about facing more Windows Vista comparisons in the press? Microsoft had finally shipped their product. Where was ours?
It wasn’t a choice.
So Apple rushed one more final candidate past developers, patched and polished a few last-minute issues, determined that it was “good enough”, and shipped OS X 10.5 Leopard to the public.
So short was the time frame that few outside of Apple saw the gold master. Even major software development firms like Adobe received their final copies at nearly the same time as everyone else.
Apple reported selling two million copies of Leopard in its first weekend, something that took Tiger six weeks to accomplish. Sales? By my count roughly $250 million.
On November 5th, just ten days after launch, Apple released QuickTime 7.3, which corrected 8 potential security loopholes.
On November 15th, 20 days after launch, Apple released OS X 10.5.1, a “bug fix” update that cleared up 23 issues, most of which seem to have been known prior to launch, as well as 3 security patches.
On December 13, 48 days later, three more security patches were added by QuickTime 7.3.1.
On December 17th, 52 days later, Apple released Security Update 2007-009, which corrected a futher 42 potential security problems in Leopard.
On the 21st of the same month, Apple released an update fixing a Safari issue in 2007-009.
That’s 80 security and software patches in less than two months.
And now we’re faced with 10.5.2, the largest, most complex software update in Apple’s history.
Currently weighing in at 354MB, it’s probably what Leopard should have been in the first place.
And all because of a few rocks.