Piper Jaffray: iPod To Continue Domination Despite CES Announcements

In a research note to clients, Piper Jaffray analyst Gene Munster said Friday that Apple is still in position to dominate digital media device market, even though several electronics heavyweights announced new music players at the Consumer Electronics Show (CES) this week.

Nothing that Samsung, Rio, iriver, and Creative all announced new devices at the show, Mr. Munster said that the companies were hoping to chip away at the iPodis market share.

"After the introduction of a handful of new portable audio devices yesterday at CES," wrote Mr. Munster in the research note obtained by The Mac Observer, "we believe that the iPod is still in position to dominate this market."

He also said that Creative is gaining the most traction with its Zen Micro line of digital media devices. Creative announced three new additions to the product line on Wednesday at CES. Helped in part by the Zen Micro line, Mr. Munster noted anecdotally that, "We believe that Creative may have had the most crowded booth at CES."

Another competitive factor will be that Creative is including Janus compatibility to the Zen Micro line within the next 2-3 months. Janus is Microsoftis DRM scheme for Windows Media files that allows rented tracks to be played on digital media devices.

Those caveats aside, Mr. Munster maintained his 12-month price target of US$100 for AAPL, and an "Outperform" rating for the stock.

Earlier on Friday, Joel Wagonfeld of First Albany Securities raised estimates on Appleis December quarter from 47 cents per share to 50 cents per share. Apple will announce financial results for the quarter on Wednesday, January 12th.

Appleis stock closed today at 69.25, a gain of 4.70 (+7.28%) on very strong volume of 39.7 million shares trading hands.

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