As the financial sharks looked on with watchful eyes, the most valuable tech company in the world, Apple, announced its third-quarter earnings on Tuesday, July 24. Apple's iPhone sales fell 8.5 million short of the analysts' expectations, reporting earnings per share of $9.32 and coming in with $35 billion in total revenue for Q3 2012. Moreover, iPhone sales for Q3 2012 fell to a dismal 26 million from Q2 2012 figures of over 35 million, validating assertions that the deficit was owing to a slump in sales thanks to people holding out for the anticipated iPhone 5.

Channing Smith, Co-Manager of Capital Advisors Growth Fund said "We expected a lot of consumers will probably delay their upgrade and their purchases until the iPhone 5 comes out. We saw a similar trend occur last year with the iPhone 4S."

Given Apple's standards, the company's abysmal profit of $8.8 billion, on revenue of $35 billion in the quarter, is a marginal improvement on the 2011 profit of $7.3 billion on revenue of $28.6 billion. For a second time round, the earnings could not live up to Wall Street expectations either. Wall Street analysts had forecasted $9.8 billion in earnings (or $10.37 per share) on revenue of $37.2 billion.

According to the survey of estimates from Thomson Reuters, post the report, Apple shares slipped 5% to $571.15 in after-hours trading.

Apple CFO Peter Oppenheimer acknowledged that the circulating iPhone 5 rumors had been the company's undoing. "Our weekly iPhone sales continue to be impacted by rumors and speculation of future products," he said.

So far Apple has kept mum, not even acknowledging the presence of rumors. CEO Tim Cook dangled the proverbial carrot and neither denied nor confirmed the rumors, but stated that "It's difficult to sort out. I am fairly convinced that there's an incredible anticipation out there for a future product. And as you would expect given what we would be able to deliver in the past...it's a reasonable amount. In terms of channel inventory, we put our current thinking in the guidance (CFO Peter Oppenheimer) provided you."

Cook went on to say "I am glad people want the next thing, I'm superhappy about that. I'm not going to put any energy into getting people to stop speculating."

Cook's statement "for a future product" and no denial throws open the gallery; perhaps, iPhone 5 rumors may indeed have a grain of truth in them.

Apple also reported a sale of 17 million iPads in Q3 2012, compared to the Q2 2012 figures of 12 million. The iPad sales, it seems, remain unaffected by iPad Mini rumors. According to IDC, 222 million tablets will be shipped worldwide by 2016, of which Apple will account for 61% sales.

The Cupertino-based firm also sold 4 million Macs in the period; however, the iPhone 5 continues to be Apple's cash cow.

With people holding out for the impending iPhone 5, all is not lost for Apple as the Q4 2012 figures will likely show an upswing. Piper Jaffray analyst Gene Munster averred "Our July survey found 94% of iPhone owners plan on buying another iPhone, suggesting the uptake of iPhone 5 will meet or exceed the high expectations."

As the speculation continues, one can only wait and watch as the Apple iPhone 5 saga unveils.