Apple will report its March quarter results next Monday, July 21, 2008. Wu chose to reiterate his Buy rating with a 6-12 month price target on the stock of US$220 per share.

“Based on our supply chain checks, we expect Apple to beat its guidance ($7.2 billion in revenue). We are modeling $7.3 billion. We are looking for 2.5 million Macs, 10.5 million iPods, and 705,000 iPhones,” Wu wrote.

Apple this week revealed sales of one million iPhones, and recent reports continue to confirm the Mac business to be booming, while iPod touch becomes a popular iPod model.

Wu continues: “We believe the gross margin will be the key metric to watch and biggest swing factor on EPS dependent on Apple’s ability to capitalize on component pricing (we are modeling 33.5 per cent vs. guidance of 33 per cent),” he said.

“We believe AAPL will likely continue its tradition of conservative guidance (seven out of the last eight quarters) to help set more realistic expectations,” Wu wrote. “We are somewhat concerned that our supply chain checks indicate a slight cut-back in Mac production, but we remain comfortable with our 2.8 million unit forecast and believe the September quarter will be characterized by strong iPhone shipments. We are modeling $8.4 billion in revenue and $1.30 in EPS vs. consensus of $8.3 billion and $1.24,” he wrote.

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