Analyst: New iPods Strengthen Apple's Lead

American Technology Research analyst Shaw Wu Thinks Apple Computeris new iPods and iTunes movie download service fall in line with expectations, but the iPod shuffle could become a runaway hit. He stated "Out of the new iPods, we believe the new 1 GB iPod shuffle is a dark horse and positioned to become an unexpected top seller. We find its small metallic matchbox form factor and $79 price very compelling for those looking for the unique iTunes experience but only want to pay an entry-level price."

The new US$249 price point for the 30GB video capable iPod may also force Microsoft to rethink its Zune pricing and strategy. The iPod now sports a brighter, higher resolution display, and an updated interface - all features that help distance Apple even more from its competition.

Longer battery life is also key in the progression to a true widescreen iPod and Bluetooth capabilities. Mr. Wu comments "We now have higher conviction that these capabilities will show up in a device in the first half of 2007."

With dramatically improved battery life, aggressive pricing, and a redesigned metal case available in an assortment of colors, the iPod nano is also positioned to remain a strong seller.

By increasing video downloads from the iTunes Store to 640x480 resolution, the company is strengthening its hold on the home entertainment market. Apple is moving deeper into the market, and the scheduled first quarter 2007 release of the iTV is another piece in Appleis bigger plan.

Mr. Wu is maintaining his "Buy" rating for Apple with a target price of $91. Apple is currently trading at $73.12, up 0.49 (0.67%).

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