Apple iPhone Sales, Outlook Come Up Short

It's going to take more than brisk sales of the iPhone and iPad to convince investors that Apple still has the magic touch.

Wall Street's nagging doubts about Apple's further growth prospects were magnified late Monday with the release of the company's results for a three-month period that encompassed the holiday shopping season.

Even though Apple sold more iPhones and iPads than in any previous quarter, the showing disappointed investors who were expecting even bigger things from the Cupertino, Calif., company.

The fiscal first-quarter numbers reinforced perceptions that Apple is now mostly selling its mobile devices to repeat customers who are upgrading to the next generation in the product line, instead of reeling in new converts to its technology. A similar problem also appears to be looming for Samsung Electronics, which competes fiercely against the iPhone.

"It looks like the high end of the smartphone market is becoming saturated," said Gartner analyst Van Baker.

If that is true, Apple figures to be hard pressed to lift its stock back to where it stood at its peak price of more than $700 in September 2012. That was before investors began to fret about fiercer competition in mobile devices and Apple's lack of a breakthrough product since the iPad came out nearly four years ago.

Apple's management amplified those concerns with a revenue forecast of $43 billion for the current quarter ending in late March, falling about $3 billion below analysts' predictions.

The company's projection also raised the unsettling specter of Apple's quarter revenue declining from the prior year for the first time in more than a decade. It last happened during the opening three months of 2003.

Apple's stock shed $44.50, or 8 percent, to $506 in extended trading following the release of the earnings report.

Apple CEO Tim Cook sought to reassure investors during a Monday conference call. Without...

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