Analyst: Demand for Mac mini & iPod shuffle Is Strong

D emand for the Mac mini and iPod shuffle is outstripping supply, but availability for the mini MP3 player should improve in March, a Wall Street analyst predicted Thursday.

American Technology Research analyst Shaw Wu said in a research note obtained by The Mac Observer that Apple has sold out of the first 200,000 iPod shuffle units produced, and that the company "is positioned to gain double-digit market share (from zero percent) in the flash-MP3 space within a few quarters."

Perhaps more compellingly, Mr. Wu said that Apple has "arguably the industryis most powerful and complete stack of hardware, software, and service." This, he said, will help Apple capitalize on the move to digital music, which he called a multi-year trend.

Other key points:

  • iPod shuffle is the price leader in both the 512 megabyte and 1 gigabyte space. "It is among the lowest priced (if not the lowest) in both 512MB and 1 GB storage capacity points," said Mr. Wu.
  • Mr. Wu praised Appleis logistical chain. "We believe an often-overlooked advantage that Apple has over most of its competitors is its world-class logistics supply chain and infrastructure that is arguably second only to industry leader Dell," he said.
  • Production of the iPod shuffle could increase to as much as 500,000 unit per month starting in March. According to his manufacturing sources in Taiwan, Apple has options to expand capacity still more if needed.

Mr. Wu maintained his price target for Appleis stock (AAPL) at US$84 a share, and reiterated his "Buy" rating on the stock. In addition, he said we was "comfortable with Appleis ability to meet or exceed its guidance" for the quarter, which is currently at $2.9 billion in revenue and 40 cents per share in profits, with 4 million iPods sold.

*In the interest of full disclosure, the author holds a small share in APPL stock that was not an influence in the creation of this article. ?

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