Gasp! A Less Than Bullish Apple Analyst?

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Seeing this trend, Gardner says that Apple probably can't sustain gross profit margins at the crazy-high 35% level seen in the last quarter. "We expect a less favorable component pricing environment beginning in the second calendar quarter, and some components could even rise in price," he said. Those 35% gross margins were too good to last.

No Major Sales Catalyst

To make matters worse, the second calendar quarter is a slow period for consumer-electronics sales. There's no buzz of the back-to-school season or major holiday gift-giving periods on the calendar. A revision to the iPod lineup in time for the holiday season probably won't happen before July at the earliest, and probably not until August or September. And though some new Macs are expected at about the same time, Gardner reckons there's no major sales catalyst for Apple in the near term, at least none that aren't already known.

But what about the iPhone and AppleTV? Here's an interesting detail only an accountant could love: Apple is going to treat the sale of the iPhone and AppleTV devices in terms of 24-month subscriptions. So money that would normally go to the revenue line of the earnings report in a lump sum will instead be broken into 24 smaller chunks.

For example, if $1 million worth of iPhones are sold in the quarter, Apple will record only $125,000 on that period's earnings report. The remaining $875,000 will be reported in increments of $125,000 in each of the succeeding seven quarters. No matter how big a hit the iPhone and AppleTV prove to be, their impact to sales and earnings will be spread out over the longer term.

For Apple, this accounting convention makes a good deal of sense. The company intends to offer regular upgrades over the lifetime of both the iPhone and AppleTV, all the while incurring costs. "Apple logically intends to leverage its decades of software expertise to enhance its products in ways that incumbent equipment vendors, which have historically treated products as closed systems, cannot," Gardner wrote.

But this also means you have to cut how much revenue Apple will report on its books in the coming three years. For the 2007 fiscal year, Gardner figures Apple will clock $23.3 billion in sales, which is a billion and change less than he had forecast previously. And he did the same thing for fiscal years 2008 and 2009, figuring Apple will report sales of $27.8 billion and $33.2 billion, respectively, in those years. Oh and by the way: He's made similar cuts to his profit forecasts for '07 and '08, but boosted his profit forecast for 2009.

Right On the Money, So Far

Gardner has a good track record figuring out which way the wind is blowing with Apple. In the past two years, he's been pretty close to the mark. He rated it "buy" with a target of $18.50 in July, 2004, and it reached that price by September. That same month, when it was trading at $19.38, he upped the target to $23.25. Apple stock hit that target within 12 trading sessions. Then he boosted it to $30, a goal met before the end of November.

He switched his rating to "hold" in December, 2004, and left it there until March, 2006, continually revising targets along the way.

And get this: On March 13, 2006, with Apple stock again in a bit of a slide, Gardner moved it back into his "buy" column when it was trading at $65.68. He left it there until October before moving it back to "hold." By that time it had gained another $9.18. Had you followed his advice, you'd be pretty happy right about now.

I am not qualified to dispense investment advice, but I certainly find it interesting that when so many in the market are saying "buy, buy, buy," someone can say something else and make it sound pretty clear. That to me sounds like, well, thinking different.

Hesseldahl is a senior writer for BusinessWeek.com and his Byte of the Apple column, covering all things Apple, appears biweekly at http://www.businessweek.com/technology/.