Analyst Gene Munster of the investment firm Piper Jaffray & Co. issued an "outperform" rating on Apple Computer stock Monday, saying the company will "grow its market share ahead of expectations" over the next two years and have a "strong December quarter", thanks to the iPod and G5 iMac.

According to Piper Jaffrayis research note, obtained in full by The Mac Observer, while supply issues of Appleis most popular products - the iPod, iPod mini and G5 iMac - still exist, customer demand remains strong.

Much of the report focused on signals from Appleis value-added resellers (VARs), about 15% of which Mr. Munster interviewed to gauge business trends. Indications from those VARs is that Appleis product sales remain about the same with previous expectations.

"We expect an in-line September quarter (fiscal fourth quarter) and December quarter (fiscal first quarter) for both Mac and iPod segments," Mr. Munster wrote. "It is important to keep in mind that the surprise of (the) last (June) quarter centered on better-than-expected results in the core Mac business, which beats our estimates by 6%. We feel that the ongoing rebound in the creative pro market will impact Apple sales. Also, we view last quarteris results as the first evidence that adoption of iPod has been improving underlying demand for Macs. We continue to be buyers of (Apple) shares."

VARs also commented that they remain optimistic through the holiday season, primarily because of demand for the iMac G5 and iPod products. Based upon VAR expectations, Mr. Munster believes the iPod and sales of iPods to Hewlett-Packard will be "significant" - far in excess of 1.3 million Apple will sell under its own name in the upcoming fiscal first quarter.

"25% (of VARs) expect the (September) quarter to be above expectations; 30% feel the quarter is in-line, and 45% expect a below plan quarter," Mr. Munster wrote. "Those that expect the quarter to end below plan indicated that lack of product availability is the primary reason, but demand is strong."

Of the 20 VARs Piper Jaffray spoke with, all seemed optimistic about the launch of the G5 iMac, with above average feedback and pre-orders from customers. While none of the dealers thought the new iMac will sell as well as the original iMac introduced in May of 1998, "some VARs are seeing customers kicking tires, while others indicated that they have 20 or more pre-orders (each)."

But supply issues for the December quarter are of concern. one-third of the VARs interviewed told Mr. Munster they have yet to receive their first shipments of the G5 iMac and all felt supply wonit meet demand. In addition, more than half the VARs indicated that PowerMac G5 sales were being affected due to the lack of inventory in the last quarter.

Piper Jaffray said that Apple is currently seeing strong PowerBook and iBook sales. The firm said that for the fiscal fourth quarter, 40% of resellers surveyed said PowerBook sales are "tracking above plan," while 30% said iBooks are selling "better than expected".

Resellers told Mr. Munster they donit expect any major new Apple products for the next few quarters. VARs felt the next logical step for the PowerBook laptop was a processor boost to the G5, but that it wouldnit happen for some time. As for the consumer eMac, dealers said either the model needed to be upgraded or discontinued, in their opinions.

Mr. Munster is targeting Appleis per share stock price to hit US$40.00. Apple stock (AAPL) closed Monday at $37.53, up 24 cents on volume of 7.1 million shares.