On Tuesday I described some reservations I have regarding the market's reaction to Apple's ( AAPL) iPhone.

While some have criticized my pricing and keyboard concerns, the real objection seems to be to my statement that Apple's shares have benefited from a nearly $20 billion incremental rise in equity capitalization from last week's MacWorld announcement.

In actuality, that was being conservative. I would say there was more than $5 to $10 of pre-announcement hype built in to Apple's share price, and then the stock rose another $10. With 870 million shares outstanding, those two pops represent $4.3 billion to $8.7 billion and $8.7 billion, respectively, which is how I arrive at nearly $20 billion in hype.

I believe those who have objected to my view are wrong. Here's why.

Were it not for the success of the iPod, Apple's growth rate would have plunged over the last two years. (You could argue that the iPod's growth rate, too, is decelerating, albeit from a lofty rate of growth.)

If you doubt my assertions on Apple's non-iPod growth, turn to page 54 in Apple's 10k, which highlights the dollar and unit sales contributions by product line and geographic region.

From 2004-2006, iPod unit sales rose from 4 million to 39.4 million, representing unit gains of 75% in 2006 over 2005 (69% in revenue) and gains of 409% in 2005 over 2004 (248% in revenue). During the same period, Apple's desktop sales rose from 1.6 to 2.4 million units -- a loss of 3% in 2006 over 2005 (-3% in revenue) and a gain of 55% in 2005 over 2004 (45% in revenue) while Apple's portable products unit sales rose from 2.6 million units to 4.05 million units, representing unit gains of 42% in 2006 over 2005 (+43% in revenue) and unit gains of 11% in 2005 over 2004 (11% in revenue).

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