Wall Street continued to make bullish predictions about Apple after reports suggested that sales of the company's Mac computers grew far more than expected in the year to May.

Sales of Macs increased by 50 per cent in the year to May, new figures from the market research company NPD suggest - well ahead of the 37 per cent growth that had been expected by analysts at Lehman Brothers.

Shipments of iPods also grew by 11.6 per cent, which was below the 14.6 per cent growth in the 12 months to April but better than the 2 per cent decline which Lehman had been predicting. The figures suggested that Apple's new 3G iPhone - which is also a music player - was not 'cannibalising' iPod sales as quickly as had been expected, Lehman said.

“While not exactly strong, iPod demand seems to be holding up and benefiting from the lack of iPhone availability," Lehman analyst Tim Luke said, referring to the fact that the 3G iPhone - which was unveiled by Apple last week - will not go on sale until next month.

Separately, Morgan Stanley said it was raising its target price for Apple shares from $185 to $210, and predicted that sales of iPhones would double in 2009 after the device went on sale at the new, lower price of $199.

In a note, the investment bank said it expected Apple to sell 27 million iPhones in the calendar year 2009, with an average revenue of $550 per unit. It said the lower price of the new, 3G iPhone would dramatically increase volumes, and also help drive revenue from sales of updates and other software in the long term.

"We believe the market generally expects a doubling of iPhone units with the lower price point, and we believe this is realistic, if not conservative," Morgan Stanley said.

The upgraded share price target followed a string of similar predictions and upgrades from other Wall Street analysts last week after Apple's chief executive, Steve Jobs, unveiled the new device last week.

Richard Gardner, a Citigroup analyst, increased its price target from $248 to $287, saying it expected the iPhone to ship 12 million units in the second half of this year and 23 million in 2009. He said Apple's decision to shift from a model where it shared in mobile operators' revenue and instead sold the device outright was "a significant positive" because the company would receive iPhone-related revenue sooner.

Toni Sacconaghi, of Bernstein Research, said he thought the 10 million new iPhones would ship in 2009, but warned that the device could cannibalise iPod sales if it was sold as a pre-pay phone for $199.

Worldwide, Apple is estimated to have sold 5 million units of the 2G iPhone, which initially cost £269 when it was released in the UK in November. The new version of the device, which goes on sale on July 11, will be 'free' on O2 contracts of £45 a month or more.

Apple shares closed up 2.6 per cent at $181. 43 last night.

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