| Analysts are expecting to Apple to respond to Microsoft's forthcoming Zune iPod rival with new features and more innovation. Bear Stearns Equity Research analyst Andrew Neff, who maintains an 'outperform' rating on Apple with a price target of $88, said that while Microsoft's Zune offering will pose a "clear challenge" to Apple, the company will likely respond by adding new features to the iPod. Specifically, the analyst is looking for innovations to Apple's iPod in four areas: wireless, content, storage, and platforms, according to a research note obtained by Forbes.com. Ironically, another analyst said that Microsoft's rumored inclusion of Wi-Fi technologies will limit the device's battery life, while other industry watchers believe that Zune will hurt Microsoft's partners and has little room to succeed. "Apple needs to be leading edge in these areas," the firm told clients. "The competition is not new -- there are plenty of music players and music downloading services but the challenge for any tech company is to obsolete your products or someone else will," Neff wrote in his report. The firm maintained fiscal 2006, 2007 and 2008 earnings-per-share estimates for Apple of $2.16, $2.70 and $3.15, respectively.
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