Apple Inc. (NASDAQ:AAPL) sold record 51 million iPhones in the three months ending December 28. The sales numbers are an increase of 7% over the approximately 48 million iPhones sold in the same quarter last year.

Analysts expected the company to sell around 55 million iPhones in the last quarter of the year, which is generally believed to be the best quarter of the year. During the same quarter, the company shipped 26 million iPads, which was in-line with the expectations of the analysts. Volume of iPads increased 14% compared to the corresponding quarter of fiscal 2012.

Weak revenue forecast

Earnings posted by Apple Inc. (NASDAQ:AAPL) came in at $13.07 billion or $14.50 per share, almost flat from $13.08 billion, or $13.81 per share in the previous year. Revenue for the company came in at $57.6 billion, which is an increase of 6%. Analysts estimated the earnings to come in at $14.09 per share on revenue of $57.5 billion.

Top line executives of Apple forecasted that the revenue of the company for the current quarter would be around $43 billion, a decline of $3 billion from the analysts’ estimate. A lower revenue forecast is something very rare with Apple; the last time it happened was during the opening three months of 2003.

Earnings forecast from Apple Inc. (NASDAQ:AAPL) would work as a catalyst to the perception that the iPhone maker is losing traction compared to mighty competitors such as Google Inc’s free Android software.

Is iPhablet coming?

The iPhone maker is expected to release iPhablet in the wake of furious competition by the Android powered devices, and the domestic phone makers in the developing countries, who are capturing the market with big display and lower prices. If iPhablet is launched then Apple would deviate from its previous strategy of making the phones that fit into the palm of the user. However, nothing has come out from Apple Inc. (NASDAQ:AAPL) officially as yet.

Activist Carl Icahn may start asking the management more aggressively to spend more money buying back the shares to increase the price. For 2013, Apple sat on the cash pile of approximately $159 billion. Stock tumbled $43.30, approximately 8% to $507.20 in extended trading after the results were released.