Piper Jaffray: iTunes Music Store may account for 5-percent of Apple’s 2006 revenue

Piper Jaffray has reiterated their “outperform” rating on Apple Computer and their $52 target price, noting that the success of Apple’s iTunes Music Store may provide additional revenue for the Cupertino-based company, according to a report from Forbes.com.

Piper’s research note stated, “We are currently modeling for iTunes revenue to account for 5% of revenue in calendar 2006.” The research firm stated that Apple could realize incremental earnings-per-share of 2 cents in 2006 based on an iTunes operating margin of 5%. Alternately, Apple could see upside of 6 cents per share on a 7.5% iTunes margin, or 8 cents based on a 10.0% iTunes margin.

“iTunes is off to a strong start in Japan, where customers downloaded more than one million tracks in the first four days following the launch of the service,” Piper said. The research firm said the successful launch of Apple’s iTunes Music Store in Japan is another indicator “that pockets of untapped demand remain in the international market for digital music.”

Related articles:
Analyst: ‘There’s a very good chance that Apple’s iTunes will become the de facto standard’ – August 08, 2005
Apple’s iTunes Music Store takes just four days to become Japan’s undisputed online music leader – August 08, 2005
Apple’s Japan iTunes Music Store sells one million songs in first four days – August 07, 2005
Apple’s ‘pure genius’ will soon make iTunes’ portal the ‘number one destination on the Internet’ – July 26, 2005
Steve Jobs: ‘WOW!’ – Apple iTunes Music Store downloads top half a billion songs – July 18, 2005
Analyst: iTunes sales exceeding expectations, estimates $83.2 million in iTunes revenue this quarter – March 03, 2005
Piper Jaffray: Apple iTunes downloads could reach one billion in calendar 2006 – February 22, 2005


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