This is where you see the downside of all the iPhone hype.

Everyone knows a new iPhone is coming soon, and as a result, people are delaying iPhone purchases until the next version is out. So now Apple (AAPL) finds itself in a new boom-and-bust cycle for its most important product -- and the quarter reported Tuesday definitely fell into the bust side.

Post continues below.
Revenue rose about 22% to $35 billion -- still jaw-dropping growth for a company as large as Apple. But lower-than-expected iPhone sales meant the company couldn't meet analyst expectations of $37.2 billion. Profit came in at $8.8 billion, or $9.32 a share, up from $7.31 billion, or $7.79 a share, a year earlier. Analysts had wanted to see about $10.36 a share.

In other words, Apple delivered a shocking miss. Analysts were preparing for a weak quarter, but this was worse than many expected. Apple has beaten Wall Street estimates every quarter except one since 2003, Bloomberg reports.

Apple shares tumbled 5% in after-hours trading to $570.49.

The company sent a clear message with its guidance for the current quarter: It's not getting any better out there. Apple expects profit for its fiscal fourth quarter of $7.65 a share on revenue of about $34 billion. The company always lowballs its guidance, but this seems extremely conservative even by Apple standards. Wall Street was expecting $10.22 a share in profit on $38 billion in revenue.

The iPhone is getting all the attention, and for good reason. More than half of Apple's revenue comes from the iPhone. The company sold only 26 million in the quarter, down from 35 million in the preceding quarter. Wall Street was expecting sales ranging from 28 million to 32 million.

Apple executives acknowledged that all the rumors about a new iPhone were hurting sales. They didn't give any hints about a future iPhone, nor did they mention any release date for the highly anticipated device.

"There's a lot of speculation out there," CEO Tim Cook said in a conference call with analysts. "There's an incredible anticipation out there for future products, as you would expect, given what we've been able to deliver in the past."

There was some good news in the report. The company sold 17 million iPads -- more than the 14 million to 15 million many analysts expected.

Even Apple can't escape the global economic slowdown. European revenue fell 6% sequentially, while revenue in the Asia-Pacific fell 22%. Year over year, however, revenue was up 16% in Europe and 25% in Asia.

"The economy in Europe is not doing well. We think this impacted our results," said chief financial officer Peter Oppenheimer.

But Cook said there were no problems that he attributed to the economy in China. Part of the decline in sequential revenue was a normal seasonal drop after the successful launch of the iPhone 4S in China in January, he said. Other changes in channel inventory also contributed to the decline.

There's very little Apple can do to fight all the rumors that are cutting into iPhone sales, so executives aren't even going to try.

"I'm glad that people want the next thing. I'm super happy about it," Cook said. "I'm not going to put any energy into trying to get people to stop speculating. I don't think that's going to amount to anything."