SG Cowen analyst Richard Chu on Tuesday issued an Apple research note obtained by The Mac Observer. In it, he describes the results of a recent survey of more than 1,400 U.S. consumers conducted by SG Cowen. Mr. Chu writes that the results show "evidence of a significant 'halo' effect, which supports the potential for substantial further Mac platform share gains; early indications that the recently announced strategic platform shift to Intel will likely help expand the Mac platform buying share; stronger than expected reservoir of OS X Tiger upgrade appetites; and positive demand dynamics for digital audio players overall and strong share dynamics for iPods in particular."

Mr. Chu sees Apple's domestic and worldwide market shares to rise to 4.6% and 2.8%, respectively, by next year, and to exceed 6% in the United States by fiscal year 2008. This is supported by a large margin of Mac and Windows purchasers who "see the announced shift to the Intel platform as more likely to push their purchase decision in favor of a Mac rather than the other way around. This augurs well for strategic mind share."

He writes that 16% of the survey respondents are more likely to buy a Mac as a result of the move to Intel, compared to 2.7% who felt that the shift made them less likely to purchase a Mac. Regarding Mac OS X v10.4 "Tiger," he says that the survey results show that 13% of the Mac users contacted have upgraded to the new OS while 38% will definitely upgrade in 12-18 months and 33% thinking about it.

He also notes that SG Cowen's consumer survey "also provides strong support for growth in related music spending as a function of a rapidly expanding iPod installed base." Mr. Chu defines "related music spending" as purchases from the iTunes Music Store as well as iPod peripherals. He says that he's assuming US$23-$24 per iPod in such purchases, but "our survey suggests actual spending may be higher by a factor of 5-7X."

Mr. Chu recommends that his clients purchase Apple's stock and said that a fair valuation would be share prices in the low-to-mid $40s. At the close of trading on Tuesday, Apple shares were $38.19, up 0.24% for the day.

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