By Katie Marsal

Published: 01:00 PM EST

Shares of Apple Computer closed at an all-time high Thursday after PiperJaffray released an upbeat research note stating that the company appears on track to see record-setting sales of its iPod digital music players during the December holiday quarter.

Apple's shares rose $1.56 to close at $85.61 on the Nasdaq Stock Market, representing an all-time closing high for the Cupertino, Calif.-based company.

In the research note, analyst Gene Munster told investors that an extrapolation of data from the first month of the quarter indicated Apple was on pace to sell between 14 and 15 million iPods before any sales of the new iPod shuffle model had been factored into the mix.

"It is likely that the impact of the iPod shuffle, which shipped on November 3, will have a material impact on the November and December NPD data and our current expectations for the quarter could prove to be low," the analyst said.

Investor optimism also received a boost from reports that Apple's iPod cell phone initiative is finally approaching fruition, with several reports out of the Far East confirming a recent release of the device to manufacturing.

At the same time, rumblings over to the company's other line of work -- its Mac business -- were similarly rosy.

In a research note released Tuesday, UBS Investment Research analyst Ben Reitzes said checks with national retailers revealed strong demand for Intel-based Macs leading into the crucial holiday shopping season.

Meanwhile, things weren't looking so bright for Apple's longtime rival to the north, as the analyst's checks turned up "little excitement" over Microsoft's Zune digital music player, which made its dismal debut earlier in the week.

"Two boxed Zune players sat ignored on the top shelf of a Plexiglas showcase packed with iPod accessories in a Virgin Megastore near Union Square in San Francisco's popular shopping district," wrote the Middle East Times.

Jake Brooks, a sales clerk at the store, told the paper: "I didn't even know they were there until a customer pointed them out."

"I'm sure we have more in a closet in the back somewhere," he said.