by , 11:55 AM EDT, May 31st, 2005

American Technology Research analyst Shaw Wu on Tuesday issued a report that reiterated his "Hold" on Apple's stock, with a US$40 price target, and noted: "We find its shares fairly valued at these levels and remain concerned with slowing growth and high investor expectations." Overall, however, Mr. Shaw's report, a copy of which was obtained by The Mac Observer, is positive, noting the possibility of "good growth" in Apple's Mac business and a "well-positioned" situation in the MP3 player market.

Regarding the iPod, Mr. Shaw has some interesting ideas. Perhaps not realizing that the iPod shuffle is a flash-based player, he says: "We envision future iPods that will utilize flash storage versus 100% microdrives today." Working from speculation that Apple is preparing 2GB and 4GB iPod shuffles, he discounts the latter because he thinks 4GB flash drives are too expensive right now, but he sees the former coming to market one of two ways: a 2GB iPod shuffle with an LCD screen but without a click wheel, or a 2GB iPod mini.

As of noon Eastern time on Tuesday, Apple's stock was selling at $40.34, down 0.54%.