SAN FRANCISCO – Apple Computer Inc. (AAPL) completed its switch to Intel Corp. (INTC) microprocessors and previewed its next-generation operating system Monday, shifting attention — for the moment — from the company's troubles surrounding the mishandling of stock options.
CEO Steve Jobs, speaking to thousands of engineers at the company's Worldwide Developer Conference, showed off Intel-based Macs for professional users and servers for businesses. They replace the last Apple machines to run PowerPC chips built by IBM Corp. (IBM) and Freescale Semiconductor Inc. (FSL)
Jobs also previewed the upcoming Mac OS X release, dubbed "Leopard," taking a few swipes at rival Microsoft Corp. (MSFT) and its much-delayed Windows Vista operating system. Since Windows XP was launched in 2001, Apple has released five major updates to Mac OS X. Leopard is expected in spring 2007.
"Our friends in Redmond, they spend over $5 billion in R&D, but these days they just try to copy Google (GOOG) and Apple," Jobs said. "So I guess it's a good example of how money isn't everything."
Jobs did not mention the stock-option scandal now hanging over the Cupertino, Calif.-based maker of Macs and iPod music players. Last week, Apple said it might have to restate financial results as far back as September 2002 as a probe into its granting of stock options widens.
Details of how some other company executives were granted options right before the stock prices rose during the period under investigation — between 1997 and 2001 — were outlined Monday in The Wall Street Journal.
Apple spokesman Steve Dowling declined to comment on the report, saying the company will not be making any further statements until its internal investigation is completed.
Apple stock lost $1.09, or 1.6 percent, to close at $67.21 in Monday trading on the Nasdaq Stock Market.
The new "Mac Pro" computer, available immediately, replaces the PowerMac G5. The new system, which runs the latest Intel Xeon chip, is two times faster and costs $2,499 — about $800 less than the G5, Jobs said.
The new Xserve computers, which also run Xeon chips, will be available in October. They are five times more powerful, depending on the applications in use, and will cost $2,999, the company said.
Both new products will carry two Xeon dual-core chips, giving each of the systems the power of four microprocessors that run at speeds of up to 3.0 gigahertz.
Earlier this year, Apple launched Intel-based iMacs and notebook computers, saying its previous chip suppliers couldn't meet the company's needs for faster, more energy-efficient chips.
In January, Jobs said the process would be completed by the end of the year. In fact, the entire product line made the switch within 210 days, he said Monday.
The products come as Apple says it is making progress in gaining new Macintosh customers — more than 50 percent of Mac buyers from Apple's retail stores last quarter were new to the platform, Jobs said.
Many analysts expect the entire lineup of Macs, which use the same chips as its Windows-based PC rivals, will boost Apple's overall computer market share in the United States. For years, it has been less than 5 percent.
While Apple's best-selling iPods have fattened the company's fortunes, Macs remain a core product, generating about half of its revenue. Apple said it sold a record 1.3 million Macs last quarter.
Analysts said Monday doubts surrounding Microsoft's ability to release Vista by its latest target date of January could further help Apple as the Mac maker is expected to ramp up its marketing campaign for the holidays. Its current ads already attack Windows as riddled with security problems while lacking Apple's easy-to-use multimedia applications.
Van Baker, an analyst at Gartner Inc. (IT), said there's "a distinct possibility" that Leopard now will even come out ahead of Vista.
"Apple is firing on all cylinders and they are executing on everything they say they will do, which is in stark contrast to its Redmond rival," Baker said.
Added Gartner analyst Mike McGuire: "Apple has built in a future demand for its product and they can also say, 'By the way, we have all this functionality now that you can't get with Windows.'"
The look-and-feel of Vista and some of its features are indeed similar to ones that already exist in the latest version of Mac OS X, also known as Tiger, which was released a year ago and upgraded in January to work on Intel-based machines.
Apple made it clear Monday it aims to stay ahead of the innovation curve with Leopard.
Some of the new features discussed include:
— "Boot Camp," a program released as a test version in April that lets owners of Intel-based Macs also run the Windows XP operating system. With a separate purchase of Windows, Mac users could then switch between the two operating systems — though using only one at a time — by rebooting the computer.
— "Time Machine," which automatically backs up all of a user's files at any point in time to an external hard drive. Users could easily search for and restore deleted or lost copies, say, of photos or documents.
— "Spaces," a new way to simultaneously display and switch between groups of applications under separate tasks.
Jobs told his enthusiastic audience Monday that many other features are planned but will remain "top secret" for now.
"We don't want [Microsoft] to start their photocopiers," he said.