Analysts Expect Healthy Apple Earnings

While sales of the iPhone (expected to fall somewhere just above a million units) have been strong, strong growth of computer sales has boosted Apple's market share and will factor largely into an uptick in revenue.

The earnings announcement comes four days before the launch of Apple's highly anticipated Leopard OS X.Brisk sales of the iPhone and the deployment of the iPod Touch are expected to contribute to an overall healthy quarter for Apple. The announcement comes four days before the launch of Apple's highly anticipated Leopard OS X.

Over the quarter, Apple shares rose a healthy 25 percent, and Apple reported year-over-year sales of Mac-based systems jumped 33 percent, against the industry average of 13 percent. Sales show no indication of slowing as Apple's U.S. market share continues to expand. Apple increased its lead as the No. 3 seller of PCs, which accounts for 6.3 percent of the market, up from 5.7 percent a year ago.

The debut of Leopard's iCal Server in particular may allow Apple to attract new clients, says Steve Feldman, president of Graphtech, a Deerfield, Ill., based solution provider. "I could see Apple gaining market share in relation to where they've been in the past, absolutely," he says. "If a company is thinking of major migration, Apple's solution is an attractive offering."

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Not everyone views Apple's steady growth as positive, however.

Peter Shore, head of the design management department at New York City-based solution provider DesignTech Services, says more people are starting to view Steve Jobs as the new Bill Gates. "Way back when, I would have said, 'Apple deserves their success,'" he says. "But in the past year I don't really feel that anymore. A lot of people feel like they've been left behind."

Apple's decision to lower the price of the iPhone two months after it debuted, a move which angered early adopters who had paid as much as $600 for the device, rankles Shore as well. Job's decision to issue a $100 credit to customers who paid full price was "transparent and embarrassing," Shore says. He laments the higher cost of products and lower quality control standards. "It's all about getting the PC user," he says. "The people who have stood by them from the beginning are feeling a little shafted."

Still, with the stock trading $30 dollars above its July peak and deployment of the iPhone across Europe and the U.K. imminent, market analysts are predicting a rosy report come Monday.

At the close of the market Friday, Apple stock was trading at $170.42.