Mr. Milunovich now believes the company will sell 3.5 million iPods in the holiday quarter. That is a jump from 2.7 million he predicted on October 25.
"Whereas the older generation still thinks it strange to own a Mac, the younger generation may consider Apple a core brand for their digital lifestyle," he wrote to clients. "That would allow the company to introduce successful new consumer products over time."
In addition, the Wall Street analyst raised his estimate for revenue in the quarter to US$3.2 billion from $2.95 billion and now sees earnings per share at 45 cents. The broker lifted its target price on the stock to $61.
Apple stock (AAPL) closed Monday at $54.38, down 34 cents, or .62%, on volume of 9.4 million shares. In the last two weeks, the stock has reached a high of $56.11 for the first time in four years.