Apple on Tuesday stunned analysts by announcing that sales of its iPhone during the quarter ending September 30 were well below expectations, selling just 17.07 million of an expected 20 million.
The company said that sales in September were hurt by customers holding off for the updated iPhone 4S, the latest iteration of its smartphone that remains popular among mobile game developers.
Revenue and profits were both up, at $28.27 billion (38 percent) and $6.62 billion (54 percent) or $7.28 per share respectively, but both of these fell shy of analyst expectations as well.
In the financial world, Apple has a history of over-performing on conservative estimates. Indeed, the company actually outperformed on its guidance, which saw revenues at $25 billion and earnings per share at $5.50, but analysts have come to expect the company's performance to far exceed its official expectations.
Today's results put a halt to consistently better-than-expected quarters going back "many years," according to YCMNET Advisors CEO Michael Yoshikami.
"It probably just signifies the company is in transition as they are rolling out a new product," the adviser told Yahoo
The company also announced that it had sold 11 million iPads during the quarter, an increase of 20 percent from the prior quarter and 166 percent year-on-year.
The company is expected to bounce back next quarter, as sales of its new iPhone 4S broke previous records
by selling 4 million units in its first three days.
Shares in the company took a nosedive in after hours trading, down 28.62 points (6.78 percent).