Apple on Tuesday reported selling a record number of iPads and Macs in the third quarter but missed the aggressive targets set by Wall Street analysts for the iPhone.
Apple sold 17 million iPhones, down 16% from the record 20.3 million it sold in the second quarter of 2011, and also significantly falling short of Wall Street estimates of 20 million to 22 million.
"As a result of new product rumors, sales did decline, especially in the second half of the quarter as speculation intensified," said Peter Oppenheimer, Apple's chief financial officer, during Tuesday's conference call with analysts.
Analysts said the explanation made sense in hindsight, and argued that the sales downturn wasn't anything to get worked up about.
"This is a knee-jerk reaction," said Brian Marshall, an analyst with International Strategy and Investment Group (ISI), of the market reaction to Apple's numbers. In after-hours trading, Apple's stock fell more than $28, or almost 7%. "This is all a matter of timing," Marshall said.
He was referring to Apple's decision to push back the launch of the newest iPhone this year from its usual June or July date to October. On Monday, Apple said it had sold 4 million units of the iPhone 4S in the first three days of retail availability, more than double what the iPhone 4 sold in a comparable period after its 2010 debut.
"The question everyone's asking is, 'What happened to three-to-four million iPhones?'" said Marshall. "The problem is that this update was delayed by several months, and exacerbated the transition to the iPhone 4S."
"Is their share declining? No," said Marshall, adding that the sales that would have otherwise been in the third quarter simply shifted into the current period, with the iPhone 4S.
Another analyst, Ezra Gottheil of Technology Business Research, echoed Marshall.
"My first thought when I heard the four million [iPhone 4Ss] sold was: well, those were four million they didn't sell last quarter," said Gottheil. "They were just deferred sales, pent-up demand."
That demand has been high -- supplies of the iPhone 4S are tight -- but Apple CEO Tim Cook was unwilling to forecast when the company would have enough on hand.
"We're confident that we will have a large supply, but I don't want to predict when supply and demand might balance because the demand is obviously extremely high right now," said Cook. "But I'm confident that we will set an all-time record for iPhone this quarter."
Apple will launch the iPhone 4S in 22 additional countries Oct. 22, and has promised to sell the smartphone in a total of 70 by the end of the year -- both moves should put even more pressure on supplies.
But while the iPhone didn't do as well as Wall Street hoped, both the iPad and Mac lines beat expectations.
Apple sold a record 11.2 million iPads, up 166% over the same quarter in 2010 and up 20% over the previous quarter.
Cook was extremely bullish about the iPad and its impact on Apple's business.
"We thought from the beginning of this that it would be a huge market, and it has been even greater than we thought," Cook said. "And it's pretty clear to me that if you forecast out in time ... the tablet market ... will be larger than the PC market."
In the third quarter, the iPhone and iPad accounted for 63% of Apple's revenue. Most of the rest was generated by the Mac.
Apple sold 4.9 million Macs, a record for Apple and more than a million more than it sold in the same quarter last year.
Oppenheimer gave the MacBook Air, which Apple refreshed in July, the lion's share of the credit for pushing notebook sales by 37% year over year.
"The increase in Mac sales was fueled by the very strong growth in MacBook Air as well as the continued strong performance of MacBook Pro," said Oppenheimer.
Gottheil said a combination of the MacBook Air and Apple's annual back-to-school promotion fueled laptop sales, while a slight rise in ASP, or average sales price, was a clue that the 13-in. MacBook Air has been a better seller than the smaller, less-expensive 11-in. model. Mac sales also benefited from pent-up demand, said Gottheil, as consumers awaited both the revamped Air and Mac OS X 10.7, aka Lion, which Apple started shipping in July.
The mixed results -- up for iPad and Mac, down for iPhone -- likely won't be repeated in the next quarter, analysts said after listening to Apple executives essentially promise that Apple will crush iPhone and iPad sales records in the coming months.
"We would expect to establish new company records for both the iPhone and the iPad in the December quarter," said Oppenheimer.
"I think they're crazy on track," said Gottheil, "and still a rocket, even with this decline of the iPhone."
"I think, whether you're celebrating Christmas or Hanukkah or Kwanzaa, it's likely your gift of choice will be an Apple product," added Marshall.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is firstname.lastname@example.org.