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Booming Apple sales strain supply, will beat estimates - report

A combination of Mac OS X Leopard, refreshed Macs, and iPods have formed a perfect storm that hint Apple will exceed its already optimistic targets, according to investment bank Bear Stearns.

Checks with retail channels as well as the Asian manufacturing base indicate that Apple's product inventory is running unusually low in the holiday quarter, with only three weeks of stock on hand versus the four to five expected for the period, analyst Andrew Neff informed clients in a research note Thursday.

But unlike some past holiday quarters, the supply crunch is the result of a "confluence" of elements rather than any one clear motivating factor, Neff explains. The new iMac design, the release of Mac OS X Leopard, and Apple's stronger presence in Best Buy stores are all contributing to a large upswing in sales.

Buyers are also taking well to the new iPod line, particularly the iPod nano, the researcher notes. Bear Stearns has raised its estimated shipments of the media players from 24.3 to an even 25 million.

Some of the most surprising expansion may come from Mac sales. The financial group claims that its Asian investigations point to an increase in shipments versus earlier predictions of flat shipment numbers. Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter.

Neff maintained estimates that the iPhone will be an important component of Apple's financial outlook. About 2.13 million iPhones should ship given the combination of seasonal spikes and the introduction of the handset in Europe.

The only cautionary message for investors in the note warns that Apple will have to release one or more products at the start of calendar 2008 to avoid the sales slump that often occurs in the wake of the holidays. These are likely, Neff says: an ultraportable, an iPhone with 3G or 16GB of storage, and completely unexpected products should help soften or eliminate the sales drop between the fall and winter quarters.

Accordingly, Bear Stearns is raising its share price estimate for Apple from $243 to $249 — the price of an 80GB iPod classic, Neff points out.