Apple failed to meet the predicted high expectations with its latest quarterly sales results.
Analysts blame a sluggish economy, especially in Europe, and a dip in iPhone sales as many consumers hold off until the launch of the iPhone 5, due towards the end of September.
The company shipped 26 million iPhones between April and June this year. While that would be a huge success story as far as most manufacturers are concerned, eager Wall Street number crunchers expected Apple to sell about 28-29m.
Apple sold 35.1m iPhones in the first quarter of 2012, so demand for the current model is slipping.
The iPhone may also be losing sales to the likes of the Samsung Galaxy S3, which made its debut during the last quarter.
Apple is still earning strongly. Its revenue rose to $35 billion, up by 23 per cent compared to the same quarter in 2011, but that was $2bn below market predictions.
According to Reuters, net income jumped 21 per cent from a year earlier to $8.8 billion, or $9.32 a share, about 10 per cent below expectations.
The news agency suggests that this “rare miss highlights how the Apple brand is becoming less resistant to the economic and product cycles that have plagued rivals.”
The iPad, meanwhile, sold 17m units in the quarter, which was above expectations.
Reuters reports that Apple sold 4m Mac computers, which was roughly flat from the previous quarter but 2 percent higher than same period last year.