Apple may have exceeded internal targets for third quarter of fiscal year 2015, but Wall Street is not impressed.

In its earnings report, the company announced that sales of iPhone, which represents more than half of Apple's business, had increased.Apple sold 47.5 million iPhone units.

While that's up 59% from a year ago, that's still below analysts' expectations of 49 million. Wired says iPhone sales usually go down in the third quarter as people wait for the next iteration of the smartphone in the fall.

But even for the fourth quarter, Apple's sales target of between $49 billion and $51 billion is still below Wall Street expectations of $51.1 billion.

With lower than expected iPhone sales and weak outlook, Apple's stock dropped 8% during after-hours trading Tuesday, according to CNN. The following day was not good either for Wall Street, as technology stocks fell on disappointing iPhone figures.  

But for Apple, there's something to be happy about. More and more Android users are switching to the iPhone, and CEO Tim Cook says the smartphone's selling price has gone up $99 to $660.

Mac sales last quarter also rose 9% year-on-year, with 4.8 million units sold. This is in stark contrast with PC market sales which fell 12% from a year ago.

Wired says the release of MacBooks with retina display, plus updated 15-inch MacBook Pros and 27-inch iMacs, likely contributed to the strong Mac sales. Citing recent reports, Anandtech says Apple is the only company that has weathered the overall decline in PC sales.

Sales of iPad, once-considered as a PC killer, was at 11 million units. That's an 18% drop from a year ago. It remains to be seen whether a dual display split-screen, a feature expected in the upcoming iOS 9, can bring the iPad back to the forefront as a PC substitute.

About Apple Watch, which became available in the last two weeks of June, there is no sales figure. Apple lumped it with Apple TV, the iPod, and similar niche products under 'other' category.

In this category, Apple recorded a rise in revenue of close to $900 million. But, contrary to earlier reports, demand for Apple Watch is up, according to Cook. He expects the Watch's sales to rise even further during the holidays.

"Our objective wasn't primarily sales; we're more excited about how the product is positioned for the long term," says the chief executive.

Overall, the world's most valuable company recorded revenue of $49.6 billion, higher than expected sales of  $49.4 billion. Profit was at $10.7 billion or a gain of $1.85 per share for investors.

"We're proud to report record earnings. Revenue is up 33 percent, the fastest growth rate in 3 years, and earnings per share are up 45 percent," Cook said during a conference call after the release of the earnings report.

Apple now holds record cash, with CNN pegging it at $203 billion. It is the only corporation that has exceeded the $200 billion mark.