Merrill Lynch analyst Steven Milunovich says he now expects Apple to sell 4.5 million iPods this quarter and 20 million for the year. Milunovich was previously looking for the company to sell 4 million devices in the March quarter. “Although iPod competition is strengthening, we believe demand for the iPod shuffle continues to outstrip supply,” Milunovich says in a research note obtained by iLounge.
Milunovich also said that digital music subscription services do not appear to be an immediate threat to iTunes. “We believe Napster’s results show that online music purchases continue to grow. We do not see the small rise in absolute number of subscribers (now at 270,000) as taking share from Apple’s iTunes,” he says.