Apple's higher standard: How 51M iPhones is somehow disappointing

Hundreds of people await the iPhone 5S and 5C launch in September at Apple's Fifth Avenue store in Manhattan.

(Credit: Sarah Tew/CNET)

Only Apple could post record smartphone and tablet sales and still leave investors grumpy.

But that's exactly what happened late Monday, when the Cupertino, Calif., company reported selling 51 million iPhones and 26 million iPads. Champagne time, right? Well, Wall Street wasn't in the mood, as it was looking for sales of 55 million iPhones and a rosier revenue forecast for the current quarter.

Shares dropped 7.6 percent to $508.60 in recent trading Tuesday, after falling as much as 8 percent late Monday.

Call it a consequence of the Apple halo effect, expectations that are set improbably high because of its track record of slick, highly coveted products, and Wall Street's need to see the next blockbuster around the corner. One analyst even asked CEO Tim Cook if he still considered Apple a growth company (Cook, for his part, said that he's very confident of year-over-year growth and that underlying results are better than they appear).

It has been several years -- since the first iPad in 2010, in fact -- since Apple has defined a new product category. It's believed to be working on a wearable device and a new TV product, as well as offerings such as mobile payments, but so far, those are just rumors. Analysts have to take Apple's word that it has "great things" in store for later this year -- a refrain they've heard many times over the past few years -- but that's becoming harder for some to do.It may seem downright silly to punish Apple following a quarter when it sold more smartphones than every rival (besides Samsung) did during all of 2013. But Wall Street isn't looking at what happened last quarter; that's old news. It's more concerned about what could happen this quarter and the next and the next. And it's afraid that Apple might have lost its mojo.

"The big question is: Are analysts right to be so pessimistic, or should they trust that Apple ... will launch a new product this year to get growth going again?" Jackdaw Research chief analyst Jan Dawson said. "At this point, it's a matter of faith."

Until those great new things emerge, analysts have to rely on iPhone and iPad sales to bolster their confidence. Unfortunately for Apple, blockbuster phone and tablet sales are no longer enough, and days of such high growth rate may be behind not only Apple but the entire high-end smartphone market.

In developed markets like the US, almost everyone who wants a smartphone has one. And the tablet market is maturing as well. That means Apple, Samsung, and all others in the mobile industry have to look to emerging regions like China for growth. Apple now has a bigger presence in that country with its China Mobile partnership, but it could take some time for sales to really take off on the world's biggest network with three-quarters of a billion subscribers.

Cook said late Monday that the iPhone on China Mobile only works in the 16 cities that have 4G. The carrier plans to expand 4G to more than 300 cities by the end of the year, but iPhone sales on that network could be sluggish for a while. Analysts had been counting on China Mobile subscribers to buy about 15 million to 30 million iPhones this year.