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Tuesday, August 01, 2006, 08:15 am PT (11:15 am ET)

AmTech offers update on WWDC expectations

With less than a week to go before Apple Computer kicks-off its 2006 World Wide Developers Conference (WWDC), analysts at American Technology Research are offering their clients an update on what to expect at the traditionally Mac-centric event.

"We anticipate that [Apple's] pro desktop will move to Intel, making the transition essentially 100 percent complete," analyst Shaw Wu reiterated in a research note.

The analyst said Apple's professional customers account for approximately 15 to 20 percent of the company's Mac business "We view [updates] as important as many of its professional and high-end consumers have been waiting for a high-end expandable Intel Mac," he said.

In addition to Intel-based professional desktops, Wu also believes there is a 70 percent chance that at least one other Mac model could see speed bumps to Intel's latest Core 2 Duo line of processors.

On the other hand, Wu continues to believe that WWDC is not the proper venue or time for Apple to introduce new versions of its iPod digital music players.

"While we would like to see Apple refresh its iPods sooner than later to re-accelerate sales, we continue to believe the probability is low that new iPods will be announced at this event," the analyst told clients. "Out analysis continues to indicate a late September-October launch and ramp for new iPod nanos as more likely."

To Wu, one of the most highly-anticipated subjects surrounding WWDC is Mac OS X 10.5 Leopard, and more specifically, whether Apple will cater to the cravings of its users and introduce virtualization technology with the major operating system update.

"While we believe Apple will most likely go the 'safer' route with Boot Camp to avoid being bombarded with Windows support costs, out analysis indicates that there is great customer demand for a more seamless capability of running Windows simultaneously with Mac OS," he said. "Should Apple decide to go "virtual," we view this as a material catalyst in driving incremental Mac units, particularly from 'switchers.'"

Wu continues to rate shares of Apple a Buy with a price target of $75. However, he said the "recent fast and furious 35 percent appreciation in Apple shares" could make near term upside difficult.

"We would not be surprised to see a relief pull-back, particularly if investors find Apple's [WWDC] announcements disappointing," Wu added.