Problems at Lotus May Be Setback for Apple’s Macintosh : Delivery of ‘Jazz’ Software Delayed
Lotus Development Corp., in a setback to Apple Computer Inc.’s battle with IBM in the office computer arena, said Tuesday that the delivery of a software package crucial to the sale of Apple’s Macintosh personal computer will be delayed two months.
Lotus Development, based in Cambridge, Mass., said minor problems in the business software, called Jazz, will push shipments to May 27. Lotus and Cupertino, Calif.-based Apple had said officially that the software would be available by late March, although the computer industry already had pushed the expected delivery date to mid-April.
Delay Comes at Bad Time
Computer industry analysts say the delay comes at a particularly bad time: Rumors on Wall Street say International Business Machines Corp. may unveil as early as June a new version of its personal computer that, in the words of one analyst, “will look very much like the Macintosh.”
“Apple has lost momentum when it most needs it,” said John Dean, analyst at Montgomery Securities in San Francisco. “There are lots of people out there waiting for Jazz who’ll now say, ‘Well, I’ve waited this long, I might as well wait to see what IBM’s got to offer.’ ”
Brian Mutert, analyst at Robertson, Colman & Stephens, also in San Francisco, agreed. “It’s definitely going to hurt Apple,” he said. “This is a critical time in the company’s bid to take on IBM in the office. Every month lost hurts.”
Apple President and Chief Executive John Sculley, who has acknowledged many times that the office-automation market is crucial to Apple’s long-term growth, has estimated that half of all Macintosh purchasers would buy Jazz software to go with the machine. Analysts estimate that Apple gets 20% to 30% of its $1.5 billion in revenue from Macintosh.
Mutert said that, as soon as he heard about the delay, he lowered his estimate of the number of Jazz software packages expected to be sold in 1985 to 100,000 from 140,000, which he said represents about $12 million in lost sales for Lotus.
Several analysts, however, agreed that the delay will be more costly for Apple, which will find it more difficult to shake off growing doubts in the mind of consumers and investors about the company’s staying power.
Apple’s stock dropped sharply in recent weeks partly because, analysts said, Wall Street expects earnings for the first three months of 1985 to be lower than projected. Apple’s stock has fallen from $30.50 on Feb. 11 to $22.875 Monday. It fell to $22 in over-the-counter trading Tuesday.
Apple executives were unavailable for comment Tuesday, but a company spokesman insisted that Macintosh sales “are up.”
Mutert said, however, that “my sources tell me there’s been very--and you can underline very --poor movement in the (office) version of the Macintosh.” He said the feeling among retailers is that customers have been waiting to see Jazz demonstrated before making a purchase.
Problems Minor, Firms Say
ComputerLand Inc., an Oakland-based computer retailer with 800 franchised stores worldwide, refused to comment on whether the delay of Jazz would hurt sales.
“We’re looking forward to getting Jazz because we think it will help us sell the Mac into the business environment,” a spokesman said, “but we also want finished products, so if it’s not ready, that’s the way it is.”
Apple and Lotus, which assert that the software problems are minor, said that authorized Lotus dealers were notified of the delay and that a second announcement will be made Friday in advertisements in the Wall Street Journal and the New York Times.
