Smith Barney analyst Richard Gardner expects Apple to sell 22 million flash-based iPods over the next two fiscal years, presuming the company does create a flash-based player, of course.
The past few months have been rife with rumours of a flash iPod. The rumour kicked off in October with claims by Thomas Weisel market analyst Jason Pflaum that SigmaTel had provided Apple with controller chips for a flash iPod.
Earlier this week TheMacMind published it's own mock up of a flash iPod. Since that report appeared a number of UK national papers have picked up the story, including the FT.
The popularity of the iPod, and expectations that Apple will launch a flash-based iPod at Macworld Expo San Francisco in January have caused Apple's share price to surge in recent weeks. Piper Jaffray, Merrill Lynch and JP Morgan have all issued glowing projections about the firm's future based on the popularity of the iPod.
Wall Street is looking kindly on Apple because it believes the iPod gives it "the means to preach beyond its small but fanatic customer base of Macintosh computer loyalists," according to a Seattle Post-Intelligencer report.
Caris & Co senior vice president and mobile multimedia technology analyst Darcy Travlos said: "What's interesting here is that the phenomenon of the iPod has really brought a lot of people into the Apple world. With people having experience using Apple (iTunes) software and going out into the retail stores and seeing the iMacs and PowerBooks, more people are becoming aware of the capabilities of Apple products. The iPod was really the item that got people to notice Apple again."
There is some concern over the current share price level however. The Seattle Post-Intelligencer report notes that Apple's stock hit an all-time high of $72.10 in March 2000, just before the Internet bubble burst. It asks: "With Apple approaching that all-time high, how much higher can it go?"
Piper Jaffray analyst Gene Munster, who recently raised his predictions on Apple's share price, suggesting a $100 target price, thinks this time things are different. He argues that "unlike dot-com companies whose bottom lines were filled with more exuberance than profit, the iPod is producing tangibly big numbers for Apple."
"There's something different going on here. What's going on at Apple is based on reality," Munster said.