Mark Connolly

iPhone Earnings Could Push Apple Above $200/Share

True about the "subscription" revenue recognition over a rolling 24 mos period. One item you overlooked is the 24 mos recognition accounting procedure will be recognizing net revenue from iphone sales i.e. Gross - cost of sales (cost of sales will also include the amortization of capitalized R&D incurred over the projected life of the product....amazingly the projected life of the iphone = 24 mos!!). I also believe sometime before the two years elapses an accounting statement issued by AAPL's auditors will be released saying it is no longer necessary to amortize the monthly net revenue from the Iphone due to no need for additional software enhancements or upgrades. Still, there will be a lag to the P&L for an extended period, but if the AT&T deal is as good as discussed that revenue should provide nice cover for the delay in rev recognition. Starting in July of 09 the monthly iphone revenue annuity along with all other product sales SHOULD make this a $200 stock then, if not earlier.