In an effort to defend their place as innovators in the cellphone market and amid competition from cheaper models by Samsung and Google, Apple planned a massive roll-out last month for their new iPhone 5C and iPhone 5S.
But it looks like all the hard work didn't pay off the way Apple expected.
Despite selling 33.8million iPhones in September, Apple's profit and margins slid causing some investors to sell off their stock in the company.
The company announced today that they expect revenue between $55million and $58billion this quarter, compared to Wall Street's estimation of about $55.65billion.
Gross profit margin for the fourth quarter was 37 percent, down from 40 percent a year ago as intense competition from the likes of Samsung Electronics took a toll. That was roughly level with analysts' average 36.9 percent forecast.
'We would have expected higher gross margins, Morning start analyst Brian Colello told Reuters. 'With the higher price phones and clear preferences toward the 5S, we were all expecting more of a gross margin boost for the December quarter.'
But Apple's CEO Tim Cook remained optimistic on a conference call with analysts, saying he expected a 'really great' holiday shopping season.
The company is releasing a new line of iPads to compete with Amazon's Kindle Fire and other tablets purchased as holiday gifts.
As for the iPhones, demand for the colorful and cheaper iPhone 5C has not been as high as expected, and the 5S is the more popular seller in stores.
In the conference call, Cook said there was still 'a very significant backlog' for the 5S.
The company sold 14.1million iPads during the quarter, up very slightly from 14 million in the year-ago quarter, and moved 4.6million of its Mac computers, down from 4.9million a year ago.
Overall revenue was $37.5billion, ahead of Wall Street's average forecast of $36.8billion, according to Thomson Reuters.
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