Apple's (AAPL) quarterly sales fell for the first time in 13 years, declining 12.7% year-over-year to $50.6 billion.

This was worse than the $52 billion analysts were forecasting. Earnings fell to $1.90 per share, also missing forecasts for $1.99.

Even in China, where the personal consumption story has been hot, revenue fell 26% to $12.5 billion.

Shares are down 8% since Tuesday's market close.

"This is what it sounds like when bulls cry," Raymond James' Tavis McCourt said.

Demand for all of Apple's products were down. But demand for iPhones was notably weak. During the quarter sales volume fell 16% year-over-year to 51.19 million units. Revenue plunged 18% to $32.86 billion.

The revenue decline outpaced the volume decline because average selling prices (ASP) were lower. All of this tied into management's disappointing guidance, which now assumes the current quarter's (F3Q) revenue to fall to $41 billion to $43 billion.

"In our view, the most negative aspect of results was the 37.5-38.0% gross margin guidance for F3Q-16, driven by negative leverage and expected lower iPhone ASPs," Deutsche Bank's Sherri Scribner said. Scribner has a Hold rating and a $105 target on the stock.

Stifel analyst Aaron Rakers characterized it as a "painful reset in process." Rakers has a Buy rating and a $120 price target on the stock.

Setback creates opportunity

Greater competition and the increasingly saturated market are surely impacting Apple's position in the market. CEO Tim Cook even blamed "strong macroeconomic headwinds."

Another major factor at play is the upgrade cycle. With an iPhone 7 anticipated in the pipeline, it's possible buyers are just waiting on the sidelines. Indeed, this is the argument that many Apple bulls are hanging onto.

"A setback creates an opportunity," said Credit Suisse's Kulbinder Garcha, who has an Outperform rating and a $150 price target on the stock.

"Given the mixed macroeconomic commentary and the slower upgrade cycle highlighted by both Apple and US carriers, we assume little improvement in the next two quarters," Morgan Stanley's Katy Huberty said. "We model 42M iPhones in the September quarter, and 75M iPhones in the December quarter." Huberty has an Overweight rating and a $120 price target on the stock.

Apple is trading at around $96 per share, down 8% from Tuesday's close.

"Analysis suggest now would be the time to get more bullish on AAPL shares," Wells Fargo's Maynard Um said. Um has an Outperform rating on the stock and he estimates shares are worth $120 to $130 per share.

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Sam Ro is managing editor at Yahoo Finance

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