Analyst: Magnesium nano, Leopard Surprises On the Way

| Apple Stock Watch

American Technology Research Analyst, Shaw Wu, thinks the next generation iPod nano is likely to have a magnesium-based metal case instead of the polycarbonate version used in current models. While some analysts are speculating that a redesigned nano will be announced in July or August, Mr. Wu thinks that problems in converting to a system on a chip (SOC) architecture are slowing the process down.

In his report, Mr. Wu says "In terms of timing, we continue to believe calendar Q4 is most likely [for a redesigned iPod nano release], specifically October and at the earliest, late Q3, meaning the second half of September."

Because of the delay in releasing the redesigned nano, the general consensus that Apple will show US$5 billion in revenue for the September quarter, he says, is "unreasonably aggressive." His revenue estimate is for a more conservative $4.6 billion.

A metal-clad nano will also help Apple keep support and warranty costs down, since the case will be less prone to scratches.

Mr. Wu expects that Apple will announce new Intel-based Pro and server Macs at the World Wide Developer Conference on August 7. This will complete the transition from PowerPC-based Macs to Intel systems well ahead of schedule. Steve Jobsi keynote at the event will likely be Mac-centric.

Apple has already announced that it will preview Mac OS X 10.5. Mr. Wu says "With respect to Steve Jobsi track record and element of surprise, we are prepared to see something that no one anticipated."

Mr. Wu is maintaining his "Buy" rating for Apple, along with a $75 price target. Apple stock is currently trading at $55.66, up 0.26 (.047%).

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