Apple shares fall on missed earnings

Apple disappointed analysts Tuesday with its earnings report, missing on estimates across the board. Revenue and sales were below Wall Street’s expectations, which sent Apple’s stock tumbling as shareholders wondered how the technology giant will stay on top of an increasingly competitive smartphone and tablet market.

The Cupertino, Calif., company reported a quarterly revenue of $35 billion — boosted by a record 17 million in iPad sales but far less than analyst estimates of $37 billion. Sales of the iPhone were also lower than expected; Apple sold 26 million iPhones against analyst expectations of about 29 million. Shares fell $30 in after-hours trading to about $570 within minutes of the report’s release.

More tech stories

Parking doesn’t have to be a hassle

Parking doesn’t have to be a hassle

Meet the man who wants to make parking in a garage as fun as riding in an Uber.

Big data: A double-edged sword

Big data: A double-edged sword

New information will improve our health and prevent crimes, but uncover skeletons and hurt privacy.

White House updating online privacy policy

White House updating online privacy policy

A new Obama administration privacy policy explains how the government will gather the user data of online visitors to, mobile apps and social media sites, and it clarifies that online comments, whether tirades or tributes, are in the open domain.

A number of factors contributed to the company’s lighter quarter. On the company’s earnings call, Apple Chief Financial Officer Peter Oppenheimer said that the economy in Europe as well as in Brazil and Australia had an effect on the company’s quarter, in addition to the fact that Apple did not add any major countries or major carriers to its fold. The company has also been lowering the prices of its older devices, which is a good for consumers but not necessarily for the bottom line.

Given the weaker iPhone sales, however, it’s hard to ignore that Apple has been facing stiffer competition in the smartphone market. The firm recently lost its spot as the world’s largest smartphone maker to Samsung, whose phones run Google’s Android operating system.

As for the iPad’s chances in an increasingly competitive market, Cook said he was not concerned by competitors such as Google’s Nexus 7.

“We’ve all seen many different tablets, hundreds of them come to market over the last year and I have yet to see any of them gain what I would call any level of traction at all,” Cook said. “We’re going to keep innovating in the space and keep making great products.”

Cook was characteristically tight-lipped about what those great products would be, the company was pleased to announce that its next version of Mac OS X, Mountain Lion, will be available on July 25.

In many ways, Apple’s biggest competitor may be itself.

The company did not add any major markets or carriers in the past quarter, meaning that the bulk of sales were where the company already has a major presence.

And the miss was reminiscent of Apple’s earnings report last October, when the company fell short of expectations after the death of its co-founder Steve Jobs.

On Tuesday, as he did last year, Apple Chief Executive Officer Tim Cook said that speculation over Apple’s next big device may have hurt the sales of its current products.

“There’s a lot of speculation out there,” Cook said. “It’s difficult to sort out. But I’m fairly convinced based on what I’ve seen that there’s an incredible amount of anticipation out there.”

Read what others are saying