Apple sags amid iPhone slump

Third-generation iPads piled up at Apple's San Francisco store during the product's launch back in March. James Martin/CNET

(CBS/AP) NEW YORK - Apple (AAPL) says its growth slowed in the most recent quarter, disappointing investors who thought its progress was unstoppable.

In both revenue and net income, Apple posted the smallest increases in years for the April to June period, failing to meet analyst expectations.

Apple reported net income of $8.8 billion, or $9.32 per diluted share, on sales of $35 billion. Although revenue was up 23 percent from the year-ago quarter, analysts were expecting $37.5 billion. That compares with earnings of $7.3 billion, or $7.79 per diluted share, on revenue of $28.6 billion a year ago.

Apple sold 26 million iPhones in the quarter, up 28 percent from the year-ago period, but down from the 35.1 million units sold in the second quarter. The company is preparing to release a fifth-generation iPhone, which could be keeping many consumers from buying the device until the new model hits stores later this year. 

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Apple CEO Tim Cook also said the company had record sales of its iPad digital tablet.

"We're thrilled with record sales of 17 million iPads in the June quarter," he said in a statement. "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."

Apple is paying a cash dividend of $2.65 per share on common stock payable on August 16, 2012.

Although sales of the iPhone and iPad remain robust, the average selling prices for both devices have declined to levels last seen in 2010 for the iPhone and the lowest levels ever in the case of the iPad.

Apple introduced a new iPad in March, but kept the older model in stores while cutting its price. The average selling prices of Macs also fell.

Apple Mac sales fell short of analyst forecasts of 4.1 million unit sales, CNET reported. Apple's desktop line took the biggest hit, with sales slipping 18 percent sequentially and 19 percent compared with the same quarter last year.

Sales of Apple's Mac-portables, including the MacBook Air and MacBook Pro lines, were up 4 percent in revenue compared with the last quarter and 3 percent from the year-ago period, according to CNET. Sales of its iPod player fell sharply, declining 10 percent over the period to 6.8 million.

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