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Strong shuffle demand could help Apple outshine iPod estimates

An analyst for PiperJaffray said Wednesday strong sales of Apple Computer's new iPod shuffle digital music player could make his current quarter iPod unit estimate appear low.

"While Apple has maintained a robust inventory, our checks with 40 big-box retailers and online vendors show that demand is outweighing supply in these channels," analyst Gene Munster wrote in a research note, referring to the new $79 flash player.

Echoing a recent AppleInsider report, Munster noted that both and are sold out of the player and one affiliate, BlueProton, is selling the player at a $30 premium.

Similarly, the analyst also drew attention to the shuffle being the only iPod not shipping within 24 hours from Apple's online store.

"That said, our checks with 20 Apple retail stores show that 100 percent have over 50 shuffles available heading into the busiest shopping week of the year," he wrote. "In other words, once again, Apple seems to be keeping the inventory of its hot new items within its direct channel until it can ramp up enough supply to cover both direct and indirect."

Also in his note Wednesday, Munster said checks with big-box retailers show that store clerks are suggesting iPods significantly more than other brands, and added that they are making those recommendations more frequently than they used to.

"When asked to suggest an MP3 player for less than $200, 70 percent suggested an iPod model," he wrote. "This figure is up from 52 percent in Jun-05 and 38 percent in Nov-05."

While Munster acknowledges that it's "way too early to make a call" on Apple's December quare iPod results, his analysis last week of the first month of NPD data (October) for the quarter suggested the Cupertino, Calif.-based company would sell between 14 and 15 million units.

"Since the shuffle was not released until 3 November, the player will likely have a material impact on the November and December NPD data and our current expectations could prove to be low," he explained.

Munster maintains an "Outperform" rating on shares of Apple with a price target of $99.