Standard & Poor has increased its rating for Apple Computer, due to "consistent revenue growth and profitability".

But, Merrill Lynch analyst Steve Fortuna predicts a more sombre future for the Internet-focused company.

Fortuna was speaking at a Merrill Lynch hi-tech conference hosted by ON24. He agreed that Apple has enjoyed excellent results over the last two years. But, he said the company’s long-term sustainability would depend on its actions over the next two years, and its success in breaking into new markets. A Web-cast of his statements is available from the ON24 Website.

Fortuna said: "Apple will be more dependent on finding new markets, finding expansion in the consumer space and more first time buyers, and trying to regain strength in the educational sector where they have lost some market share." He added it would take effort by Apple to reach these targets, underlining the current rumour of a forthcoming Apple-branded PDA in his prediction of a "pretty aggressive device and appliance strategy".

He ended optimistically, saying Apple has huge opportunities available to it in the Internet Appliance market place. He also predicted excellent results over the next few months from the company, which he valued at a target price of $150 per share – though he did not explain the effect the forthcoming stock split might have on this target figure.

Apple closed on the Nasdaq at $113.125 Friday, gaining $2.4375 on the day’s trading.