Is Apple Seeing Downside of Its Rumor Machine?

Misses earnings forecast for first time in years

Tuesday was a rough day for Apple. The company released its first quarterly earnings report since the death of founder and former CEO Steve Jobs, falling short of analyst expectations for the first time since 2002 (or 2004, depending on whose data you're using).

During the analyst conference call, CEO Tim Cook and CFO Peter Oppenheimer seemed to blame the disappointment on the constant speculation about a new iPhone. Those rumors slowed iPhone sales in the second half of the quarter, they said, as people waited for the new device. Both executives repeatedly referred to the iPhone rumors as a factor in sales, Oppenheimer saying that there seemed to be a new rumor every day and sounding relieved that "that's behind us."

Of course, speculation is also part of the hype cycle for new Apple products, and it paid off once the iPhone 4S was released at the end of the quarter. Apple says it sold 4 million iPhones during the first three days of release, a result that Cook said exceeded "our wildest dreams."

"I am confident that we will set an all-time record for iPhone this quarter," he said.

As for the past quarter, Apple sold 17.07 million iPhones overall, significantly less than the 20 million that analysts had estimated. It reported earnings of $7.05 per share and revenue of $28.3 billion, compared to analyst forecasts of $7.22 per share. As of 6:30 p.m. Eastern, the company's stock had fallen more than 6 percent in after-hours trading.

Cook also sounded confident about the growth of the iPad, of which the company sold a record 11.1 million units in the past quarter. Other companies have released iPad competitors, but Cook said, "I think it's reasonable to say none of these has gained any traction thus far." He also acknowledged that the iPad might be "cannibalizing" sales of traditional desktop and laptop computers, but he said that's having a bigger effect on the sales of Windows devices than Macs.

And Cook took a moment to talk about Jobs' death, calling him "a visionary, a creative genius, and an amazing human being." Under Jobs' leadership, Cook said Apple has created a unique combination of hardware, software, and services, and he plans to continue pursuing that with "relentless focus."