iPod sales may beat Street expectations

Analyst firm Bear Stearns today said it expects Apple iPod sales to exceed Wall Street expectations for the second quarter, and reiterated its outperform rating on Apple shares. Analyst Andrew Neff said that despite many recent estimate reductions, he has confidence that Apple will reach 10.5 million iPod units, well above Wall Street's expectations of 8.5-9.5 million. The analyst cited checks of suppliers for the higher number, as well as continuing strong end demand, according to BusinessWeek Online. Neff believes Apple is planning to eventually put Windows on its Macintosh computers, and despite uncertain timing, the analyst views Windows on Mac with full support as a natural progression in Apple's strategy. The analyst kept his post-option EPS estimates of $2.25 for fiscal year 2006 ending September, and $2.91 for fiscal year 2007. Neff holds a 2006 price target of $100 on Apple shares, according to the report.

Bear Stearns is not alone. The day Apple released its Boot Camp software -- which allows Intel Mac owners to install and run Windows XP -- American Technology Research senior analyst Shaw Wu said the move could hurt other PC makers, while growing Apple's own market by attracting more "switchers."

The same day, UBS analyst Ben Reitzes told clients that Apple "could benefit from a significant OS upgrade cycle starting in its December quarter," and that he believes the move "positions Apple to gain share with customers reluctant to purchase Macs due to concerns over interoperability with Windows systems."

Analyst firm Merill Lynch said it isn't convinced Apple's Boot Camp technology will lead to more sales, but admitted that it could expand the company's potential market.

Filed under: iPod