Lehman upgraded Apple Computer (AAPL

) to buy from neutral.

Analyst Daniel Niles says Apple's Q2 results exceeded expectations and benefited from sales of new, more powerful products, including the Titanian Powerbook G4 laptop. In spite of a difficult economic environment, he notes the company was able to reduce its channel inventory to four weeks from 11 weeks a couple of quarters ago. In light of Q2 results, the company's guidance is going forward, and he sees a $0.28 fiscal 2001 (Sept.) loss, and $0.95 fiscal 2002 EPS.