Apple fell in German trading after the company's profit forecast and sales of the iPad tablet computer missed analysts' estimates.
The technology firm dropped 3.9 per cent as of 10.49am in Frankfurt after it reveleaed it sold 4.19 million iPad tablet computers last quarter, fewer than the 4.5 million predicted by analysts. The results also included the first full quarter of sales for iPhone 4, released in June. Apple sold 14.1 million iPhones and 3.89 million Macintosh computers.
Analysts have speculated that supply shortages likely held back sales of both the smartphone and iPad.
The company predicted profit of $4.80 a share for the current quarter, missing the $5.03 average of 36 analyst estimates compiled by Bloomberg.
The forecast, coupled with a drop in new contracts reported by IBM, pushed down technology stocks in Asia and Europe.
While Apple's profit climbed to a record last quarter, chief executive Steve Jobs said the company will save its cash for deals as it repels threats from Googlen and Research In Motion.
"Everyone is closing in and it's a huge question of how they are going to respond," said Michael Obuchowski, chief investment officer of First Empire Asset Management, which holds Apple shares.
"I'm really worried about Apple; I'm not convinced that I'm going to hold Apple two years from now."
Earnings helped push up the iPhone-maker's cash and investments to above $50 billion, giving Apple the technology industry's biggest warchest for acquisitions, said Brian Marshall, an analyst at Gleacher and Co. in San Francisco.
Apple may eventually make a large acquisition, possibly for a company such as Akamai Technologies, which produces technology for distributing media content on the web, he said.
"They are in a position to outbid everybody if they view the asset as valuable enough," said Marshall, who recommends buying Apple shares and doesn't own any himself.
Jeff Young, a spokesman for Akamai, didn't return an after- hours call seeking comment.
"We'd like to continue to keep our powder dry," Mr Jobs, joining an earnings conference call for the first time in two years, said yesterday when asked whether Apple would use the cash for a stock buyback or dividend. "We strongly believe that one or more very strategic opportunities may come along."
Mr Jobs spoke after Apple reported that fourth-quarter profit rose 70 per cent to $4.31 billion, or 4.64 a share, on sales of $20.3 billion.
Gross margin, the percentage of sales left after deducting production costs, will be about 36 per cent, compared with 36.9 per cent last quarter and 41.8 per cent a year before that, chief financial officer Peter Oppenheimer said on the call.
Apple slumped as much as 7.9 per cent to $292.75 in extended US trading yesterday. Earlier, it had climbed $3.26 to a record $318 in regular trading on the Nasdaq Stock Market. The shares, up 51 per cent this year, surpassed $300 last week. Apple accounts for 21 per cent of the Nasdaq 100 Index.
Mr Jobs dismissed the threat of rivals. Apple's approach of designing the software and hardware for its devices results in a better user experience, he said. By contrast, Google gives Android free to handset makers including Motorola and HTC, creating a "commodity" experience, he said.
"We are very committed to the integrated approach, no matter how many times Google tries to characterise it as closed," Mr Jobs said. He said Apple is outselling BlackBerry- maker RIM and he doesn't "see them catching up with us in the foreseeable future".
Even so, competition is increasing. The Android operating system was the most popular smartphone software in the U.S. in the second quarter, according to Gartner.
Samsung Electronics, HTC, Motorola and Dell are among the companies using Android in tablet computers to rival the iPad. Hewlett-Packard, the largest computer maker, is developing a tablet computer.
Bloomberg