Analysts are divided on their assessment of Apple's sales success in this year.

While some analysts recently issued conservative judgements on the company, American Technology Research analyst Shaw Wu has raised his assessments for sales this year, and advises his investors to buy Apple stock.

He believes the company will continue to achieve above-average market growth rates, and continues to state the company has "arguably the industry's most powerful and complete stack of hardware, software, and service addressing the digital entertainment space."

iPod sales remain strong

Wu cites his own series of checks across the industry that suggest Apple is selling more iPods than current industry wisdom claims, "well above Apple's guidance", he said.

"We believe demand for iPods is coming in ahead of our previous expectations. We are picking up that iPod shuffle price cuts and the introduction of the 1GB iPod nano are generating incremental demand, particularly in non-Apple channels," he wrote.

Wu also observed strong iPod Hi-Fi sales, and continued demand for video-capable iPods - in fact he describes sales as above seasonal trends, "down modestly from very high December quarter levels".

Wu predicts revenue and sales rise

The analyst has raised his estimates for Apple's sales in its current quarter. "Our new estimates are $4.43 billion in revenue and 8.8 million iPods, up from $4.37 billion and 7.7 million iPods."

Apple has been aiming for $4.3 billion in revenue and 9.5 million iPod sales, he said. He expects the company will grow 35 per cent over the next 12 months.

"We remain firm believers that the move to digital entertainment is a multi-year trend and that Apple is the best-positioned company to capitalise with its unique and defendable iPod, iTunes and Mac franchises."

Wu expects $19.4 billion in revenue for Apple's 2006 financial year.