Apple Earnings Send Stock Falling

Shares of Apple tumbled after the company's iPhone sales missed expectations. The disappointing quarter came as the global economy moved into slower gear. Sales of Macs were down, while in the one bright spot, iPads continued to be even more popular than expected.

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LINDA WERTHEIMER, HOST:

Also disappointing, Apple's earnings report yesterday. Wall Street was underwhelmed.

And as NPR's Steve Henn reports, Apple's shares fell more than 5 percent.

STEVE HENN, BYLINE: Apple brought in $35 billion in revenue, but the company still managed to disappoint Wall Street analysts, like Walter Piecyk at BTIG.

WALTER PIECYK: Apple missed on iPhones - they only sold 26 million. The street was expecting much more.

HENN: Most of Apple's profits come from the iPhone, and Apple CEO Tim Cook told investors widespread rumors Apple will release a new phone in the fall may have depressed sales.

TIM COOK: You know, I'm glad that people want the next thing. I'm super happy about it.

HENN: But that wasn't Apple's only problem. Cook said the sluggish global economy, especially in Europe took a toll, too.

COOK: France and Greece and Italy were particularly poor.

CAROLINA MILANESI: Yeah. I think in generally consumers in Europe are getting pickier.

HENN: Carolina Milanesi is a vice president at Gartner Research.

MILANESI: They are more demanding; they are trying to get the best for their money.

HENN: To make things worse, Walter Piecyk says the big telecoms companies all over the worlds are tired of subsidizing customers who want the newest iPhone.

PIECYK: The change in here is that guys like AT&T, when you go back to them and say give me another subsidized phone they're saying, no - wait another 10 months or pay us $600.

HENN: And Piecyk says, in this economy that could take a big bite out of Apple's future sales.

Steve Henn, NPR News, Silicon Valley.

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