Apple Investors Say Thin Notebook May Extend Rise After IPhone

Apple Inc. shares have climbed 39 percent since plummeting to a six-month low in February, and shareholders say demand for Macintosh personal computers may continue the rally, reported The Bloomberg.

Sales of PCs led by the new MacBook Air, which is less than 1 inch (2.5 centimeters) thick, may have countered a post- holiday drop in iPod and iPhone orders in Apple's second quarter. U.S. Mac shipments jumped 33 percent last quarter, compared with a decline at PC leader Hewlett-Packard Co., said researcher Gartner Inc.

The Air's success may help Chief Executive Officer Steve Jobs overcome concern that a slowing economy will curb consumers' spending on music players and mobile phones. Apple gave a forecast that fell below analysts' estimates in eight of the past nine quarters. The stock dropped the most in five years in January after Apple's sales forecast disappointed investors.

``It may be affected by the economy, but we're talking about a company that has a multiple-year, very clear strategy to superior growth,'' Dan Chung, CEO of Fred Alger Management Inc. in New York, said in a Bloomberg Radio interview. The firm owns about 1.9 million Apple shares. ``A lot of investors who saw the stock fall to about the $120 level realize now, in hindsight, that they've missed an opportunity.''

Apple fell $7.96, or 4.7 percent, to $160.20 yesterday in Nasdaq Stock Market trading after American Technology Research said investors' expectations for today's results may be too high. The shares climbed to a record $202.96 in December, then fell as low as $115.44 on Feb. 26.

Sales probably jumped 32 percent to $6.96 billion in the quarter ended March 29, according to the average of 24 analysts' estimates in a Bloomberg survey. Profit may have advanced to $969.6 million, or $1.07 a share. Cupertino, California-based Apple reports earnings after the close of U.S. trading today.

Spokesman Steve Dowling said the company declined to comment ahead of the earnings report.

Apple, which began offering the iPhone in June, said it had sold 4 million through Jan. 15. It may have shipped as many as 2 million iPhones last quarter, said Minneapolis-based Piper Jaffray & Co. analyst Gene Munster. That's down from 2.32 million over the holidays. He predicts iPod sales of up to 10.5 million players, compared with the record 22.1 million sold in the three months ended in December.

Macs account for more than a third of Apple's sales, giving it about 3 percent of the worldwide PC market, said Kathryn Huberty, an analyst at Morgan Stanley in New York. Every additional percentage point adds $6 billion to sales and $1 to per-share earnings, according to Huberty.

Apple's share of the U.S. PC market rose to 6.6 percent in the first three months of this year, from 5.2 percent a year earlier, according to Stamford, Connecticut-based Gartner. Apple ranks behind Dell Inc., Hewlett-Packard and Acer Inc. in the U.S. ``Mac sales are key,'' said Romeo Dator, portfolio manager at the All American Equity Fund at U.S. Global Investors Inc. in San Antonio. The firm manages $5.5 billion, including Apple shares. ``All indications are that the company keeps gaining market share.''

Of 30 analysts covering Apple, 26 suggest buying the shares and three recommend holding, according to data compiled by Bloomberg. One analyst, Tavis McCourt at Morgan Keegan in Nashville, Tennessee, says sell.

The promise of new products should spur a share advance even if Jobs disappoints with a ``soft'' forecast today, Dator said. Apple may release an iPhone that connects to the Internet using faster networks, as well as redesigned Mac desktops and notebooks for back-to-school shoppers this year, he said.