Apple may be experiencing slightly less strong Mac sales while iPod demand remains strong in its March quarter, an analyst said yesterday.

American Technology Research analyst Shaw Wu told investors: "Macs will likely come in towards the lower-end of expectations due to a pause ahead of Mac OS X Leopard's launch and anticipation of new 8-core Mac Pros, even as iPods appear better than expected."

The analyst held to his "Buy" assessment on the company's stock, and increased his target price on Apple by $3 to $118. Apple will report its March quarter results on 25 April.

However, Wu's comments were predicated on a June launch for Mac OS X 10.5 – a launch Apple last night warned wouldn't now take place until October this year.

When Mac OS X 10.5 is launched, Wu expects Mac sales to climb in response to pent-up demand, particularly from among the company's professional users.

Meanwhile, Wu warns that Apple will sell 1.4 million Macs and 10.3 million iPods in the March quarter, raising $5.12 billion in revenue.

"For the June quarter, Apple will likely offer its usual conservative guidance," Wu warned. "We advise investors to take advantage should Apple shares pull back on short-term concerns."

"We continue to view Apple as among the strongest fundamental stories with its four-prong vertically integrated strategy (Mac, iPod and iTunes, Apple TV, and iPhone) and see several catalysts in the quarters ahead, including Mac OS X Leopard, new Macs, new iPods, new movie and carrier partners, and lower cost mobile phones," Wu explains.