Disappointing sales slash $40bn off Apple shares - Telegraph.co.uk ~ Electronic Gadgets

However, Tim Cook, chief executive of the technology business, was still bullish on the company's performance.

"We are really happy with our record iPhone and iPad sales, the strong performance of our Mac products and the continued growth of iTunes, software and services. We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better," he said.

However, investors were rattled by the company's projections for the current quarter. Analysts had forecast sales of around $46bn, fuelled by an uplift in China, but Apple said they were likely to come in between $42bn and $44bn.

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Mr Cook blamed a slowdown in America, its largest market, where a number of mobile carriers have changed the rules around mobile phone upgrades, making it harder for customers to get their hands on the latest iPhone as soon as it released.

However, he said the projections were distorted by currency exchange rates, and did not do credit to the underlying health of Apple's business. He was particularly optimistic about the company's prospects in China, where China Mobile, the world's largest mobile business, this month agreed to start selling Apple devices.

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"China Mobile has more subscribers than anyone in the world – three quarters of a billion - so I see it as a watershed for Apple. I have a very strong belief in [our] ability to do great things together," he said.

"Last week was the best ever week for mobile activations in China…we have got quite the ramp up in front of us."

He also reassured investors that the company has new products in the pipeline, reigniting long-running rumours that the company is developing wearable technology, such as an Apple watch, or an Apple television. "We are working on things that you can't see today," he said.

Not everyone was convinced, however, and the slump in Apple's shares is likely to agitate investors who already feel that the company should return its $159bn cash hoard to shareholders.

Carl Icahn, the billionaire activist investor, has spent the last few months lobbying for Apple to increase its share buyback, claiming that the company is wildly undervalued.

"[This is] one of the greatest examples of a 'no brainer' we have seen in five decades of successful investing," he said last week, In a seven-page letter to shareholders.

However, Alex Gauna, analysts at JMP Securities, said: ""The quarter itself was reasonably solid although the number of iPhones shipped was a slight disappointment to what people were looking for. The problem is with the guidance. The range of $42bn-$44bn at the mid-point implies no growth.

"So after showing modest signs of improvement, we're back to a no-growth outlook. Given that we're adding China mobile to the equation as a distribution channel. I think people were looking for more. That's why we're seeing pressure on the stock and it is a concern. It's something Apple needs to find an answer to because even though this a great company, it has great products and it's shareholder-friendly, paying a nice dividend and buying back shares, it's not a growth story. If it can't prove that it's going to be a growth story again, the valuation is too high."

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