“Shares of Apple Computer Inc. may surge 25 percent in the next year on new products and iPod sales growth, Morgan Stanley’s Rebecca Runkle said Thursday, a day after two rival analysts said the stock is overvalued,” Edgar Ortega and John Melloy report for Bloomberg News. “‘We believe market share and new product opportunities accelerate even more than we expected in 2006,’ Runkle wrote in a note to clients. She cited her recent visit to Apple headquarters in Cupertino, Calif., and a consumer survey.”

“More people plan to buy an iPod or an accessory this holiday than a cell phone, according to a survey of 2,500 people by Morgan Stanley. People who own iPods are three times more likely to buy Apple’s Macintosh computers, the survey showed,” Ortega and John Melloy report. “Sales of iMac and iBook computers may grow more than 43 percent in 2006 and 2007, helped in part by a shift to Intel Corp. computers chips, according to Runkle. Even though iPod has more than 70 percent of the music player market, its sales will expand because just 8 percent of U.S. households own them, Runkle wrote. She also sees expansion of Apple retail stores.”

Ortega and John Melloy report, “Apple will unveil new products at its Macworld Expo on Jan. 8. The company in the next 12 months will likely start selling a cell phone in order to fend off competition from telephone equipment makers that are adding digital music players, according to Runkle. An iPhone could generate $1.2 billion in sales and add 9 cents a share to 2006 in earnings, she wrote.”

Full article here.
Clarification: Macworld Expo 2006 runs Jan 9-13. Apple’s CEO Steve Jobs’ keynote presentation, during which new products are traditionally unveiied, is scheduled for Tuesday, January 10, 2006 at 9am PST.

Advertisements:
• The New iPod with Video. The ultimate music & video experience on the go. From $299. Free shipping.
• Connect iPod to your television set with the iPod AV Cable. Just $19.00.
• The New iMac G5. Built-in camera and remote control. From $1299. Free shipping.
• Apple USB Modem. Easily connect to the Internet using your dial-up service. $49.00.

Related articles:
Moragn Stanley raises target price on Apple Computer shares to $90 – December 16, 2005
Morgan Stanley predicts Apple shares surge, Apple ‘iPhone’ in 2006 – December 16, 2005
BofA cuts Apple rating to ‘neutral’ from ‘buy’ based on valuation, Apple shares drop over 4-percent – December 14, 2005
Bear Stearns downgrades AAPL based on valuation – December 14, 2005
It’s official: Apple CEO Steve Jobs to deliver Macworld San Francisco 2006 keynote address – December 01, 2005