“Merrill Lynch raised estimates on Apple Computer after the company unveiled its iPod Photo–earlier than the research firm expected–and announced the iPod U2 special edition. With the iPod Photo starting at $499 and the U2 edition starting at $349, Merrill said the prices might seem high for the new iPod models, ‘but that was the initial reaction to the iPod Mini.’ The firm said Apple believes it is seeing an iPod ‘halo effect’ on the Macintosh computer business and is gaining share in targeted markets. Merrill, citing increased iPod shipments, raised the estimate for the fiscal first quarter ending December to earnings of 42 cents per share on revenue of $2.95 billion, up from earnings of 40 cents per share on revenue of $2.85 billion,” Forbes reports.
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