| Apple's share of the US flash-player MP3 market grew from 43 percent in February to 58 percent in March, according to research firm NPD. Apple's share of the US hard-disk player market was also at 90 percent, while the iTunes Music Store marketshare was above 70 percent in April. The data were reported by Merill Lynch analyst Steven Milunovich in a research note to clients. The analyst also discussed future iPod enhancements expected by the end of the year, the (non-existent) mobile phone threat, and more. The firm reiterated its 'Buy' rating on Apple stock with a price target of of $51 per share. Based on data obtained during an interview with Apple CFO Peter Oppenheimer, Milunovich noted that Apple's iPod market share in Japan was around 40 percent, representing a "good" international growth opportunity and that the "stunning" numbers from March, during a supply-constrained quarter, would make April numbers even more interesting.
During the same interview, Oppenheimer said that Apple was not concerned about the cell phone threat to iPod. According to the research note obtained by MacNN, Apple's management believes that the iPod still offers the best way to manage and listen to music and the ability to listen to music in cell phones is a complementary feature--rather than a replacement for iPod. Oppenheimer said that the "worse" user interface and limited battery life would help iPod maintain its competitive edge over the "mobile phone threat."
Despite rumors to the contrary, Apple management also believes that it find a way to work with the mobile carries to bring iTunes to mobile phone users. Many industry reports said that said that the delay in the introduction of the Motorola iTunes phone was in part due neogotiations with mobile phone carriers who see digital music as an incremental source of revenue. It is believed that mobile carriers, eager to see a slice of the profits, wanted the cell phone to be the primary interface for purchasing songs (rather than the computer, as in the iTunes model).
Apple said it "doesn't foresee problems working with carriers," implying that negotiating shared economics wouldn't be a deal killer, according to the research note.
Milunovich also said that he expects wireless and video capability in iPods for the holidays. "Our guess is that iPod will run short video clips, such as Britney Spears gyrating while 'Toxic' plays."
The note also indicated Apple may begin another heavy ad campaign highlighting Macs. Currently, Apple's TV spots only feature the iPod, but the analyst is lookig to coming Mac ads to augment the halo effect.
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