Merrill Lynch analysts yesterday downgraded their assessment of Apple stock to "neutral" from "buy".

The analysts warn that Apple's recent success and growth may have "set investor expectation too high", Forbes reports.

Merrill Lynch warns that the growth in MP3 player sales is bound to decelerate, but did say he expected sales to climb by a third next year.

The analysts also warn that the Intel transition may impact against Mac sales, while Microsoft's launch of Windows Vista next year could also impact Apple.