Second, just as analysts like to downgrade a stock after it has lost 75% of its value, they will only get this after it bludgeons them. One or two more quarters will establish the precedent, then the cork will pop in Q2'09 or Q3'09 when the power of the additive iPhone earnings will start kicking in. At that point the analysts will realize that their models don't work and the story will break, and the stock will surge upward.

Plus, the base model for the multiplicative effect even ignores the earnings potential for the App Store and for mobile gaming, which will be a bigger push in the holiday season and beyond. The App store is like Apple's money printer – the work is done by others and Apple takes a 30% cut. Within a few years this will be several billion of revenue for Apple and almost all of it will flow right to the bottom line.

Hello! Wall Street doesn't give a crap. Apple will be at $90 soon and maybe back to $105 by the end of the year. No investors that matter are impressed by this report. To WS, Cisco is a better company because they make internet routers and not some high-tech toys for young-at-heart adults.

Every forum I go to there's a bunch of people screaming that their stock is undervalued. If fundamentals no longer matter, what difference does it make what revenue numbers are produced? Apple is worth $92 and if this article is posted 20 more times, Apple is still worth $92 give or take $5 either way.

Investors should not get too worked up over this article. It has little connection with reality.

Disclosure: Long Apple for four years.

A: Because they have agendas which are not compatible with careful and unbiased analysis.

Disclosure: Long Apple

Hi JAy, Hi PED – Regarding GAAP vs. Non-GAAP, in my understanding the only part of Apple financials that change in non-GAAP are iPhone sales. But this is the little piece of financial magic (I call it the REVENUE BOMB) that the analysts fail to add in their projections.

So, basically if you take the analysts' Apple Q1'09 GAAP and add this expression {(number of iPhones sold in that quarter * $500) + (trailing revenue from preceding iPhone sales quarters)} you will get the Non-GAAP revenue.

I haven't calculated it but you see the idea, and you also see why Andy Zaky gets so frustrated with the inability of most analysts to fathom the iPhone subscription revenue model, which leads to their underprojection.

Say it with me folks…..in Non-GAAP the iPhone cash is recognized immediately but the revenue is recognized in an equal chunk at 1/8 of the revenue per phone, every quarterly, for 8 quarters.

I appreciate the report on Zaky's numbers, and I appreciate comparing his estimates to the Street concensus.

But comparing Zaky's non-GAAP estimates to the Street concensus GAAP estimate is like comparing apples and oranges (no pun intended).

Now, if you can find a Street non-GAAP estimate, I would like to see that comparison.

ex ped: Done. I've added this graph, per your request:

The only Wall Street analyst I've found who has projected non-GAAP earnings for this quarter is Piper Jaffray's Gene Munster. He has Apple earning $2.70 per share (non-GAAP) in Q1 on adjusted sales of $12.4 billion.

No, I dont believe in this hocus pocus number juggling. And I already own AAPL bought at $88 some time ago.