JP Morgan Trims Apple Computer Outlook on Higher Costs for iMac

Analyst Daniel Kunstler says the company's costs have tripled since the new iMac launch in January

JP Morgan cut its estimates on Apple Computer (AAPL ).

Analyst Daniel Kunstler says component prices for the iMac were so high as to force the company to raise prices on all new iMac models by $100. While this is a good thing that the company is taking steps to protect its margins, he believes Apple took this step very reluctantly, as rising prices are a rarity in the personal computer industry. He believes profitability on new machines may have come close to evaporating in the quarter. Kunstler cut his $0.11 Q2 EPS estimate to $0.06, and trimmed the $1.45 billion revenue estimate to $1.35 billion. Kunstler maintains his $25 12-month target.