In light of "recent proprietary checks with industry and channel sources," Mr. Wu believes demand for the iMac G5, PowerBook G4, and iPod are turning out "better than expected," though sales of the iPod shuffle and Mac mini sales are "constrained by availability of supply." He expects iPod shuffle supply constraints to ease in March, but cannot predict when the supply of the Mac mini will improve.
Mr. Wu has raised his March quarter estimates to US$3 billion on earnings per share of 44 cents, from $2.9 billion on earnings per share of 40 cents. He also raised his AAPL price target to $99 from $84.
"We continue to find AAPLis valuation not unreasonable," Mr. Wu explains in his letter. "We believe AAPL will continue to command a premium multiple as it remains among the best growth stories in technology." Mr. Wu also reiterated his "buy" rating on the stock.
AAPL was at $88.20 on heavy volume in midday trading.