In its first quarter, Apple posted earnings of $13.1 billion, or $14.50 per share, on revenue of $57.6 billion. It shipped 26 million iPads, up from 22.9 million a year ago, and 4.8 million Macs, up from 4.1 million a year ago. But it sold only 51 million iPhones.
And while that was a record and, frankly, an obscene number of smartphones for anyone to put in the hands of consumers over a three-month period, it wasn’t enough for analysts, who were expecting three million more.
And so on Tuesday, investors took Apple out for a trip to the woodshed, slashing more than eight percent from the company’s share price and sending it tumbling more than $48 to a low of $502.07, leaving it teetering on the edge of $500 for the first time in months.
Clearly, investors worry that the maturation of the high-end smartphone market is beginning to limit Apple’s growth potential, and they’re looking for the company to announce a new product as disruptive as the iPhone and iPad. As Cantor Fitzgerald’s Brian White wrote in a Tuesday note to clients, “It [is] more clear than ever that Apple needs to introduce a new product category to return to healthier growth trends.”
And, for what it’s worth, that does appear to be the plan. Asked during the company’s earnings call if Apple still intends to enter new product categories this year, CEO Tim Cook replied, “Yes, absolutely.”
That blunt reassurance may not have gone over well with the average Apple investor, but it was good enough for Carl Icahn, who poured another $500 million into the company.
“I believe there was a major positive in Apple’s message when Tim Cook stated that within the year new products in new categories will finally be introduced,” Icahn told CNBC. “It should be noted that the last new product in a new category was introduced four years ago. It was called the iPad.”
This article originally appeared on Recode.net.