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11/27/2006
01:23 PM
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Black Friday Bolsters Apple's Bottom Line

Investment company says Apple may exceed its Apple Retail Store revenue estimate of $1.45 billion for fiscal 1Q07 by $55 million or more.

Strong Black Friday sales at Apple's retail stores appear likely to lift the computer company's earnings, according to an informal survey conducted by investment bank ThinkEquity Partners.

The investment company conducted a nationwide survey of Apple Retail Stores on Friday, Nov. 24th, and noted healthy visitor traffic. The firm says that Apple may exceed its Apple Retail Store revenue estimate of $1.45 billion for fiscal 1Q07 by $55 million or more.

"According to our observations, the Apple Retail Store conversion rate was over 8% on Friday; in other words, we witnessed over eight purchases for every 100 visitors, on average," stated analyst Jonathan Hoopes in a research note issued on Monday. "The overwhelming majority of purchases fit into a small bag. That said, demand for CPUs [notebooks and desktops] and larger beyond-the-box items [such as printers] also appeared healthy."

Based on the survey, ThinkEquity raised its target price for Apple stock from $100 to $110. Apple opened trading today at $91.60. As noted in ThinkEquity's disclosures, the firm makes a market in Apple securities.

Recent reports in a variety of publications, citing anonymous sources at Asian contract manufacturing companies, have suggested that Apple's 2007 product lineup may include significant new products beyond those that have already been announced such as Apple's iTV set-top box. These rumored new products include a mobile phone and Mac tablet PC.

"Never in the history of the PC has a company been better positioned to both gain share and improve profitability, in our opinion," Hoopes said in the report.

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