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iPods flowing too slow to reach Street estimates?

Apple's new iPods are a hit early in the holiday shopping season, but the company may not be able to sell as many of the digital music players as some Wall Street analysts have predicted, says research firm PiperJaffray.

An analysis of Apple retail stores and third-party retailers over the recent holiday weekend revealed "very strong" demand for iPods, according to anaylst Gene Munster. However, the analyst believes Apple is "holding inventory for its own stores" as third-party retailers reported very low supply of the players.

"Based on limited iPod availability (during times of peak demand) outside of Apple retail stores and, we continue to believe that some Street estimates for iPod unit shipments for the December quarter are too high," Munster said in a research note obtained by AppleInsider.

"We are currently modeling for total iPod shipments of 9 million. While we do believe slight upside to our estimate is achievable, we do not expect Apple will be able to ship the number of units that are already anticipated in some Street models."

Instead, the analyst expects see a "continuation of strong demand for both iPod and Mac" product lines during the current quarter with a "more robust" product year to follow next year.

"While 2005 was clearly a year heavy in iPod innovation at Apple, we do not expect a slowdown in new/updated iPods in 2006," Munster said. "In addition to new and updated iPods, 2006 will be a significant year for the Mac line. The incorporation of Intel and introduction of new form factors will both likely lead to the launch of several new/updated Macs in 2006, more changes to the Mac lineup than were seen in 2005."

PiperJaffray maintains an "Outperform" rating on Apple stock, but increased its price target from $68 to $79.

The opinions and analysis expressed above are those of research firm PiperJaffray are not necessarily those of