Merrill Lynch analyst Steven Milunovich has raised expected profit margins for Apple’s iPod this coming quarter by an extra 500,000 to 4.5 million.

Mr Milunovich added that full year unit sales are now likely to top 15 million for the year.

The news will be welcomed by iPod accessory designers and retailers alike, many of whom are likely to register positive sales increases as a spin-off effect.

Merrill Lynch’s analyst also drew attention to the fact that consumer demand is still exceeding available iPods.

“Although iPod competition is strengthening, we believe demand for the iPod shuffle continues to outstrip supply,” Milunovich commented.