Apple yesterday announced it has delayed worldwide shipments of its iPod mini until July, saying demand is exceeding supply.

The company's vice president of hardware product marketing Greg Joswiak told the Financial Times: "We are actually consuming just about all the 4GB 1-inch Microdrives Hitachi make. As they make more, we'll get more."

Supplies of Apple's new music player remain constrained in the US. Apple yesterday described "stronger-than-expected demand" for the product there.

This has caused Apple to divert products originally intended for international markets to the US. This also means Apple expects to meet its financial targets for the quarter – the product is selling out.

Joswiak explained: "We felt it was better to hold off on the release rather than have shortages everywhere."

Hitachi to increase production

Hitachi could not confirm that it supplies the hard drives for Apple's popular product, but a spokeswoman did confirm to Macworld UK last night: "Yes, Hitachi has seen increased demand for Microdrives."

"The 4GB Microdrive has been immensely popular, and demand is outstripping supply."

Apple's choice of the G5 processor from IBM has revivified the Mac maker's pro desktop products. IBM technology continues to lead the industry – as IBM also developed the hard drives used in iPod mini.

Hitachi acquired IBM's then loss-making Microdrive business unit for $2.05 billion in 2002. Now, the company plans to ramp-up manufacturing for the product, according to Reuters. "We're actively working to boost production capabilities, but cannot share the details of those plans at this time," the company said.

A spokesman said: "We are planning to boost production at our plant in Thailand, and it will come sooner rather than later."

This follows comments from Hitachi Global Storage Technologies CEO Jun Naruse on Wednesday who confirmed that company intends stepping up production to "keep pace with demand," Reuters reports.

Wall Street's digi-music ticker-tape parade

Investor reaction on Wall Street was immediately positive. Historically, Apple's shares have taken a tumble when the company has announced delays in shipping new products. With the global launch delayed because of the product's popularity, investors began snapping up stock.

Investors also took heart from Joswiak's assurance to MacCentral that the iPod mini is not taking sales from the company's market-leading iPod: "The iPod mini is doing as we hoped it would by growing the market for the iPod rather than cannibalizing its existing business," he said.

Apple closed up 5.4 per cent at $26.87 last night (a $1.37 rise on the day). The climb continued on the after hours market, where Apple stock stood at $27.30 at close of trade last night – 84 cents below the company's 52-week high.

Hitachi also benefited from the news. That company's shares rose 3.14 per cent on the days trade.

Thrivent Financial fund manager Jim Grossman called the demand and supply challenge "a nice problem to have".

Cautious coverage creates buying chance

Schaeffer's Investment Research yesterday pointed out that Apple's shares have been under fire in recent days, with both a Barron's report and CNN/Money "admonishing" Apple's recent stock price gains.

"This anecdotal negative sentiment is puzzling, as Apple's fundamentals have rarely been more encouraging," Shaeffer's wrote. This report describes Apple's recent success: its stock has doubled in under a year, and reached a new 52-week high earlier this month. Apple stock is also "perched above its ascending ten and twenty-week moving averages," this report states.

Along with media negativity on the stock, just six of the fourteen analysts that cover it rate it as a stock to buy, and 16.5 million Apple shares being acquired by the short trading market, Schaeffer's said: "This negative sentiment provides a fairly solid "wall of worry" along which the stock can climb in the near term". A buying opportunity.

Apple makes the music

US investors' daily sees the news as consolidating Apple's lead in the war to dominate the digital music distribution market.

It argues that because the exclusively iPod-compatible iTunes Music Store isn't yet available internationally Apple may benefit from shipping physical product at a point closer to launching the store outside the US.

This piece also points out that mass-market sales of the product – in the US and abroad – will serve to "reinforce" the position of Apple's already market-leading music service.

Standard and Poor's analyst Scott Kessler said: "Once someone has an iPod, they're not changing from iTunes because iTunes is designed to serve iPod users. All the other services are incompatible."