Apple Inc (AAPL)

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09:05 AAPL Apple Computer: Cautious on Dec quarter; more details on IPhone - Prudential (75.02 ) -Update-

Prudential notes AAPL will report Sept Q earnings on Wed Oct 18, after the market close. Firm expects AAPL to post upside to street ests driven by Mac strength and favorable component cost declines. Firm models rev of $4.8 bln and EPS of $0.55, ahead of consensus of $4.7 bln and $0.51.

Firm is more cautious on the outlook for the DecQ and thinks that iPod sales and overall margin could fall short of investor expectations. Firm sees upside to iPods as limited given the absence of new product offerings and increasing competition from MSFT's mid-Nov launch of Zune and sees recent price cuts to AAPL's iMac and video iPods placing pressure on co's margin. Firm expects AAPL to introduce two cell phones in the March quarter, including a smart phone. Firm says co will produce these in limited quantities due to market acceptance concerns and battery life.