Apple hopes to top gadget charts with U2 iPod player

By David Akin
Thursday, October 28, 2004

In teaming up with Irish rockers U2, Apple Computer Inc. is staying at the top of the gadget charts with its iPod portable music player. The news on Tuesday that Apple will release a U2 version of its iPod — a bold black-and-red device loaded with digital copies of hundreds of new and old U2 tunes — along with an iPod photo edition was enough for some of Apple’s most bullish analysts to raise estimates yesterday morning for the Cupertino, Calif.-based firm.

“Apple remains our top pick within [personal computer] and enterprise hardware,” Smith Barney’s Richard Gardner wrote, as he bumped his 12-month target price for the stock to $60 (U.S.).

“Apple’s growth and margins now are more in line with Dell’s,” wrote Merrill Lynch’s top tech analyst Steve Milunovich, raising his current quarterly profit estimate to $2.95-billion from $2.85-billion and share profit to 42 cents from 40 cents. Mr. Milunovich kept his 12-month target price on the stock at $49. “If iPod success spills over to Mac sales, there could be further upside to our estimates.”

Investors apparently agreed with the premarket calls of both analysts, sending Apple’s stock to a 52-week high early in the trading session on the Nasdaq Stock Market. The shares rose $2.33 yesterday to close at $50.30 on the Nasdaq Stock Market.

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