Apple's share price continues to rise. Last night it closed at $53.50, its highest level since September 28, 2000.

September 29, 2000 saw Apple's stock plummet to $25.75 after Apple issued a profits warning due to lower-than-expected sales.

The stock reached its highest ever level on March 22, 2000, topping $72.094.

Apple said recently that it expects sales to rise to $2.9 billion by Christmas Day, fuelled by the must-have iPod and the new iMac G5.

The outlook could be even better. Al Frank Asset Management president John Buckingham told Bloomberg: "The iPod is all the rage. There's certainly a lot of momentum behind Apple. We think earnings will be better than what analysts are expecting."

If anything spoils the party it will be Apple's inability to meet demand. FTN Midwest Research analyst William Fearnley said: "Resellers are struggling to keep iMacs in stock, which is a signal that underlying demand is strong," he added that FTN's recent survey of US retailers found that "positive momentum continues'' for the iPod.

Market momentum

The iPod won 82 per cent of the market for hard-disk-based players sold in US retail stores in the 12 months ended in August. The same period a year earlier it had 64 per cent of that market, and 33 per cent two years before, according to NPD Group.

Industry watchers wonder whether Apple will be able to maintain its share of the hard-disk-player market. Interestingly, when the iPod, and the iPod mini, were launched the consensus of many was that it was too expensive. Its popularity has possibly proven that the market is prepared to pay the premium.

FTN's Fearney thinks that the recently unveiled iPod Photo may be too pricy for the mainstream. He said: "Jobs may need to trim the highest price to lure a broader base of customers. The colour screen at that price will be for the high-end customer. For it to be more mainstream, we would expect them to adjust the pricing next year.''

Apple is the second-best performing stock in the Standard & Poor's 500 Index this year, thanks to the popularity of the iPod. The Index represents 70 per cent of all US publicly traded companies and is considered the benchmark for US equity performance.

The biggest gainer in the Standard & Poor's 500 index this year is TXU Corp., owner of Texas's largest power company.