Matt Krantz

USA TODAY

Apple (AAPL) missed by a mile.

Fanning concerns the world has finally reached a saturation point with smartphones, Apple late Tuesday stunned investors by missing revenue and profit forecasts for the March quarter. It was even worse than widely expected - and expectations were already low.

The company reported adjusted quarterly earnings of $1.90 a share, which is well below the $2 a share expected by analysts. It's not just a matter of just missing forecasts. Profit fell 18% from the same period a year ago. Revenue also missed expectations, falling about 12% to $50.6 billion, the biggest drop in revenue since the third-quarter of 2001, according to data from S&P Global Market Intelligence.

A slowdown in the company's star product, its popular smartphone, was largely to blame. "As anticipated, the top-line came in below expectations driven by slowdown in iPhone units," Abhey Lamba, an analyst at brokerage Mizuho Securities, said in a note to clients.

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Apple shipped 51 million smartphones, which was ahead of expectations. But the average selling price of each of those phones was $625, well below the $659 analysts expected, Lamba says. Meanwhile, the company's drop in tablet sales continued, with units down 19% from last year, Lamba says.

Shares of Apple got hit hard early Wednesday, plunging more than 7% to $96.60. The downward move means the company shed about $43 billion in market value.

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The collapse in Apple's profits and the stock is the latest and biggest problem for increasingly nervous tech investors. Just last week both Google parent Alphabet (GOOGL) and Microsoft (MSFT) missed revenue and earnings forecasts for the first quarter. Trouble in Apple is also a problem for investors at large, since the company is the most valuable stock in the Standard & Poor's 500, giving it a huge effect on the value of the market. Prior to the after-hours selloff, Apple was valued at $579 billion - outstripping any other company in the S&P 500.

Apple is facing the same challenge that's plagued other companies that have become so dominant. The company's sheer size and influence create a practically impossible barrier to growth - as matching its past success and growth is increasingly difficult. Exxon Mobil (XOM), Cisco Systems (CSCO) and Microsoft are all examples of companies that have struggled to maintain growth.

There is at least one bright spot to Apple's sheer size: Cash - and lots of its. Apple ended the March quarter with cash and investments of $232 billion, up 7.4% from the end of 2015. The company also said it was boosting the quarterly dividend 10% to 57 cents a share.

Follow Matt Krantz on Twitter @mattkrantz