Goldman adds Apple to America conviction buy list

Goldman Sachs added the Apple Inc (AAPL.O) to its Americas conviction buy list, saying shares will likely benefit from the launch of its third generation iPhone next month, and from the sharply higher projections of iPhone sales for the second half of years.

Analyst David Bailey also raised his target on the stock to $ 220 to $ 185, and said Apple would be able to increase its available iPhone subscriber base by more than 80 percent this year because of aggressive expansion in international markets.

"We continue to expect Apple to turn its 10 million unit target for calendar year 2008 driven by a wider global distribution and availability of third-party applications, which should keep Apple well ahead of competitors," Bailey wrote in a note dated May 22.

Apple has signed agreements to bring the iPhone to Singapore, India, Australia and the Philippines this year. Earlier this month, an Apple spokeswoman said the iPhone would make its debut in these countries "later this year," but declined to comment on plans to bring the iPhone to Japan and China.

Bailey, who rates the stock "buy", "expects iPhone unit shipments to increase to 11 million in 2008 from 3.7 million in 2007.

"We also expect Apple to continue to run the Mac unit growth 3 times the PC market in years," he added.

On Friday, theflyonthewall.com reported that Merrill Lynch raised its price target on Apple shares to $ 215 to $ 186, and maintained its "buy" rating. Reuters could not immediately confirm the report.

Apple shares rose nearly 3 percent to $ 181.68 in trading before the bell Friday. The stock has risen 42 percent in the past three months as investors regain confidence that Apple can sustain growth even in a weakened economy.