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Bear Stearns analysts Andrew Neff, William Hand and Ted Chung lowered their estimates for Apple -- key excerpts from their note to clients:

* Reflecting our expectation of a slower transition to Intel-based Macs, we're lowering our estimates for FY06/FY07 and our CY06 target from $103 to $100. Nevertheless, we reiterate our Outperform rating given our confidence in demand for iPods (new products, ongoing leadership), Macs (replacement cycle/new users), and more innovative products.

* Just-released market research data (NYSE:NPD) has indicated a slower start for Macs in Jan/Feb (units down 2% YoY), implying a shortfall from our outlook owing to limited product availability (MacBook Pro) and customer pause. We're cutting our March-qtr CPU unit est. from 1.13mm (up 6% YoY) to 1.06mm (down 1% YoY), primarily given weaker notebooks.

* We didn't change our iPod unit assumptions (still expect 25% seq decline in 2Q6 or 10.5mm), though we lowered ASPs given declines in iPod shuffle pricing (reflecting lower flash memory prices) and 1GB nano launch.

* Looking ahead, we remain optimistic: our expectations include an Intel-based iBook, true video iPod, wireless iPod, other innovations in coming months. With Intel transition likely complete by the Developers Conf in 8/06, AAPL is setting up for a strong C2H06 CPU cycle.

* In light of reduced Mac expectations and lower iPod ASPs, we're lowering ests for FY06 from $2.41 to $2.25 (post options) on revs of $21.6bn (up 55% YoY) and for FY07 from $3.01 to $2.91 on revs of $26.7bn (up 24% YoY). For 2Q06 (March), we're lowering EPS from $0.55 to $0.49 (vs. $0.33) on revs of $4.88bn (up 50% YoY) -- guidance is for EPS of $0.38 (incl. $0.03-0.04 in options) on revs of $4.3bn.

* We continue to view the stock pullback as a buying opportunity, w/ AAPL's P/E at 17x our CY07 operating EPS est. and 19x on Street oper EPS. We're lowering our CY06 target from $103 to $100 by using a 28x P/E multiple on CY07 oper EPS and adding net cash/sh of ~$12.

AAPL 1-yr chart:

Source: Bear Stearns Lowers Estimates For Apple on Slower Transition to Intel-based Macs (AAPL, INTC)