New OS Delay Shows Strains At Apple

The iPhone is coming on time, but at a price: Apple's new Leopard operating system is on hold until October. The decision reflects an overstretched company that's expanding faster than its small staff can handle, analysts say. Apple's talent for innovation, showcased by products like the iPod—and more recently, AppleTV and the iPhone—may be overwhelming its ability to produce.

With 18,000 employees—a fraction of competitors like HP—the company doesn't have a deep back bench. As they expand their product line, Apple has "only so many engineering resources to go around," says one observer. That makes investors nervous; the stock fell over 2% on the announcement. "They've shaken people's confidence in their ability to execute," an industry analyst told CNET. (More iPhone stories.)