Apple Rallies on Hopes Of New Line of iPods
Shares of Apple rose sharply after the company said it will hold a product launch next week, prompting speculation that a new line of iPods will be unveiled.
Apple didn't specifiy what the product will be when it announced the event for San Francisco on Sept. 5.
Goldman Sachs analyst David Bailey said Apple is likely to launch a new line of revamped iPods with "significantly greater functionality," including a "much-anticipated" full screen video iPod, and advised investors to buy the stock ahead of the event.
"Coming at least a week ahead of our expectations, the almost certain launch of a new family of iPods creates another opportunity for upside in the back half of the year and provides another reason to own Apple shares," Bailey wrote clients on Wednesday.
The technology analyst reiterated a "neutral" rating on the stock with a price target of $165.
"As its product cycle story unfolds, we continue to recommend that investors buy Apple shares, especially on company-specific or broader market pullbacks, as new product announcements and higher earnings should keep the stock moving toward our $165 12-month price target," he said.
Separately, Apple said Wednesday it will sell TV shows in Britain via its iTunes store, which follows the launch of a similar service in the U.S. in 2005. The company said programs such as Lost and Desperate Housewives would be available for 1.89 pounds, or $3.80, per episode.
Users will be able to download and keep the programs, which will be in near-DVD quality, and watch them on a computer, fifth generation iPod or widescreen TV. Apple said it expects to add more content soon.
Earlier this month, Apple unveiled a line of slimmer desktop computers in a long-expected update of its iMac brand, positioning it for the back-to-school and holiday shopping seasons.
The new iMacs, which sport thinner aluminum casings and dual core chips made by Intel , have displays measuring 20 inches and 24 inches and cost about $1200 to $1800.
Meanwhile, Nokia is the latest company looking to cut into Apple's market share. The world's largest cellphone maker announced a new lineup of music-focused mobile phones and a music-downloading service on Wednesday.
The announcements are part of a broader shift for Nokia, which is trying to reposition itself as a software and services company, rather than just a hardware maker.
Peter Kang is a markets reporter at CNBC.com. He can be reached at email@example.com.