Apple\'s Q4 Mac sales ahead of expectations?

"In our checks with industry and channel sources, we believe Mac sales are coming in ahead of expectations," the analyst said in a research note released to clients. "We believe that Apple is benefiting from a strong back-to-school period where students need a personal computer today, and Macs remain the preferred PC platform for managing documents, music, photos, and videos."

Although Apple's transition to Intel processors remains a risk, Wu believes the impact so far has been negligible. "We believe Mac momentum will likely carry into the December quarter," he added.

As a result, Wu and his firm American Technology Research raised their estimates and price target for Apple. For the September quarter, the firm is now now modeling 1.38 million Macs, $3.7 billion in revenue, and 39 cents in earnings per share (EPS), up from previous estimates of 1.32 million Macs, $3.6 billion in revenue, and 36 cents EPS.

For fiscal years '05 and '06, Amtech Research is now is modeling earnings of $1.46 and $1.70, up from $1.44 and $1.60 respectively. Additionally, the firm upped its price target on Apple from $42 to $45.

Commenting on iPod nano sales, Wu said his checks continue to indicate good, but not great, iPod nano sales.

"Black nanos are selling well, while white nanos continue to lag." The analyst added: "We are hearing that Apple grossly underestimated demand for the $249 black 4GB iPod nano and is realigning its supply chain to meet this demand dynamic."

Wu made no changes to his 7.1 million iPod unit forecast for Apple's fourth quarter and continues to rate Apple stock as "Hold."