Oct. 12 (Bloomberg) -- Apple Computer Inc. shares fell as much as 11 percent after the company's revenue fell short of analysts' estimates last quarter, the first time in almost three years that Apple has missed predictions.

The shares traded at the equivalent of $46.05 at 9:03 a.m. in Germany, down $5.54 from yesterday's closing price of $51.59 on the Nasdaq Stock Market. Sales at Cupertino, California-based Apple rose 57 percent to $3.68 billion in the fourth quarter, the company said yesterday, missing estimates of $3.74 billion.

Shipments of iPod music players also disappointed. Some analysts had expected that the iPod Nano, introduced by Chief Executive Steve Jobs last month, would fuel sales and allow Apple to beat the most optimistic estimates. Instead, Apple said parts shortages meant it couldn't make Nanos quickly enough to meet demand. The pencil-thin iPod replaced the Mini, Apple's most-popular model.

``It wasn't a clean handoff'' from the Mini to the Nano, said Eugene Munster, an analyst at Piper Jaffray Cos. in Minneapolis. ``If you just look at the numbers, there's reason for concern and that's why the stock is trading down.''

While iPod shipments climbed to a record 6.45 million in the quarter, including more than 1 million Nanos, they fell short of analyst predictions that ranged between 6.7 million and 8.5 million units. The main concern is production, not demand, Munster said. ``I don't think it's fair to say the demand is not there,'' he said. Shipments may reach 9 million units this quarter, Munster said.

Apple had beaten analysts' revenue estimates for 10 straight quarters, helping the shares rise 60 percent this year and triple last year.

Surprise

The shortfall surprised investors who three months ago shed concerns about the growth in iPod demand after Apple last quarter shipped 6.16 million players.

``You have to deliver a flawless quarter when your stock is high and obviously it wasn't a flawless quarter,'' said American Technology Research analyst Shaw Wu in San Francisco, who was expecting iPod shipments to reach 8 million units with help from the Nano.

The Nano is one of three new iPod models introduced by Jobs in the past year, including photo-capable iPods and the Shuffle. The company today hosts an event in San Francisco and may release a new version that plays videos, said Munster, who rates Apple stock ``outperform.''

Slow Production

Apple said its inability to make enough Nanos held back shipments of the players. Sales of the Nano fell ``far, far short'' of demand, Tim Cook, executive vice president in charge sales and operations, said on a conference call with analysts yesterday. The slow production was caused because Apple was unable to get certain parts for the device, Cook said.

Executives resisted pressure from at least seven analysts on a conference call yesterday to be more specific about the supply problem or what parts were lacking.

Cook wouldn't say whether the supply problem will be resolved this quarter.

Pascal Cagni, Apple's vice president of operations in Europe, the Middle East and Africa, said in an interview today that the company saw ``staggering demand by all means'' for the Nano.

Fourth-quarter net income rose to $430 million, or 50 cents a share, from $106 million, or 13 cents, a year earlier, Apple said yesterday in a statement. Profit included a tax benefit of 12 cents a share, Apple said.

Profit this quarter will be about 49 cents on revenue of $4.7 billion, Apple said in the statement. Analysts were expecting profit of 48 cents on sales of $4.53 billion.

Victim of Success

``They've gotten to a point where they're a victim of their own success,'' said Barry Jaruzelski, a technology analyst for consulting firm Booz Allen Hamilton Inc. in New York. ``The good news is that the cachet of Apple and the iPod means that people will wait to buy an iPod.''

The company has shipped more than 28.2 million iPods since Jobs, 50, introduced the player in October 2001, making it the best-selling music player in the U.S., according to The NPD Group Inc., holding a 72 percent share of the market.

Earnings more than quadruped to $1.34 billion, or $1.56 a share, in fiscal 2005 as sales surged 68 percent to a record $13.9 billion, Apple said. It's the first time annual profit has topped $1 billion in the company's 29-year history and the first time in a decade that sales have surpassed $10 billion.

To contact the reporters on this story: Connie Guglielmo in San Francisco at at cguglielmo1@bloomberg.net.

Last Updated: October 12, 2005 03:20 EDT