You are not permitted to download, save or email this image. Visit image gallery to purchase the image.
For only the second time since 2003, Apple's profit and revenue performance fell short of market expectations.
"For a number of quarters now, market expectations have been far more bullish than company guidance. In the past, Apple has been able to meet the seemingly impossible expectations the market set for them."
However, the result yesterday, while beating the company's own guidance, came in well below expectations, he said.
Apple products have been falling in price, hurting the company's income and share price.
Apple revealed that its growth slowed in the most recent quarter. In both revenue and net income, the company posted the smallest increases in years.
It was not so much sales volumes, as in the April to June period Apple still sold 17 million iPads, beating expectations, and 26 million iPhones, at the lower end of expectations.
But Apple's average selling prices for both devices declined to levels last seen in 2010 for the iPhone and in the case of the iPad, its lowest levels.
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.
Mr Timms said the biggest reason for the miss on expectations was the "generation gap".
There had been much hype in the market about the impending release of the iPhone 5. It had been two years since the iPhone 4 was released although an upgraded 4S version had been released. The latest quarter saw the accumulation of customers delaying purchases in anticipation of the next generation iPhone as well as a slowing in 4S sales, which had been in the market for two quarters.
"While Apple's sales grew at the slowest pace since mid-2009, it continues to outgrow many of its peers in the technology space," Mr Timms said.
Net income in Apple's fiscal third quarter was $US8.8 billion ($NZ11.24 billion), or $US9.32 per share. That was up 21% from $US7.3 billion, or $US7.79 per share, a year ago.
Revenue for the California-based company was $US35 billion, up 23%. Analysts were expecting $US37.5 billion.
Apple shares fell $US34.99, or 5.8%, to $US565.93 in after-hours trading, after the release of the results.
Mr Timms said Craigs still had a target price of $US650 a share for Apple.
"While the iPhone remains the flagship product of the company, it is pleasing to see that the iPad is starting to make a significant impact on revenue.
"So far, the tablet market has been dominated by Apple. While there has been some competition from the likes of Samsung, the iPad remains the standout product among its peers."
The expected launch of the iPhone 5 later this year was likely to provide a significant jump in in demand and provide an impetus for a rise in the share price, Mr Timms said.
Additionally, expanding store, online and carrier distribution in China, and other emerging markets like Brazil, was likely to generate company growth.