American Technology Research analyst Shaw Wu has repeated his Buy rating on Apple stock, predicting the company will continue its above-market growth.
Wu reports that his earlier concerns at high investor expectations, competition, the transition to Intel, and even stock valuation "have lessened".
"We believe Apple is well-positioned to continue above market growth rates with arguably the industry's most powerful and complete stack of hardware, software, and service," he said.
In a note to clients he describes a better-than-anticipated peak in 2GB iPod nano sales, iPod shuffles and also new Aperture software.
Wu reflects that in the weeks following the launch of the iPod nano, black 4GB models outsold other varieties by "a wide margin". However, the Thanksgiving shopping season has driven new consumers to the low-end, lower-priced version of the product. Wu predicts Apple will sell 9.7 million iPods (up from 9.4 million) .
It's more good news in terms of Apple expectations as it reaches the end of the quarter: "For the December quarter, we are raising our above consensus estimates for the second time to $4.9 billion in revenue and $0.54 in EPS (up from $4.8 billion and $0.52). We are now modelling a gross margin of 27.8 per cent, up from 27.6 per cent," he said.
The analyst expects Apple will achieve $18.2 billion revenue in its 2006 financial year and $21 billion in 2007.