PortalPlayer supplies the ARM-based system-on-a-chip used in both the iPod nano and the full-size iPod. The company saw its revenue for the quarter just ended increase 30% from the prior quarter, with 12-29% revenue growth expected for the December quarter. Given those numbers and the fact that iPods account for 33% of Appleis revenue, Mr. Wu sees them as a reflection of the strength of iPod sales.
Mr. Wu also reported on his recent checks with industry and channel sources, noting that “demand appears to be more uniform on iPod nano with sales of iwhitesi now catching up with iblacksi and even 2 GB models catching up with 4 GB. vPod sales are off to a strong start, with demand causing lead-times to stretch to one week and in some cases two weeks for black models.”
In light of those developments, Mr. Wu reiterated his “Buy” rating on Appleis stock, along with his US$63 price target. “Our concerns with high investor expectations, competition, the INTC transition, and even valuation have lessened,” he wrote. “We believe AAPL is well-positioned to continue above market growth rates with arguably the industryis most powerful and complete stack of hardware, software, and service.”
At 11:47 AM EST on Tuesday, Appleis stock was selling for $56.11, down $0.68, or 1.2%, for the day.
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