Last night, Apple reported that iPhone sales were lower in its most recent quarter than in the same period a year ago.

That seems like a very significant moment, some people talking about a blackberry style death spiral.

Is it really that bad or is the market getting far too excited over something that we all knew would come at some point?

It is a moment, clearly. A symbolic moment. And it is equally true that historically very dominant handset makers.

once they start to decline in volume, the wheels have come rattling off.

I think in Apple's case, a couple of things have to be kept in mind.

The first is that Apple is mid-product cycle, in other words, this first quarter fell between the iPhone 6 and the much anticipated iPhone7.

And historically, in these mid-cycle moments, Apple has reported some pretty soft revenues.

In the past, revenues have come down to sort of zero growth.

This time, we just happened to break the zero barrier.

Because of weaker sales in China.

Yeah, China was particularly weak this quarter. That's probably macro-economic.

So maybe you don't want to make so much of having broken the symbolic zero barrier.

The second thing to keep in mind is that the stock is actually priced for a decline.

The stock trades at about 11 times earnings if you take out the cash that is sitting on Apple's balance sheet, it's at 8 times earnings.

So what the stock is saying is we expect sales to go down from here.

And if Apple can prove that all that's gonna happen is a flat lining of sales from here, I think the stock could potentially go up quite a lot.

How realistic is that, though? Because I thought that the whole business model of technology companies like this was growth.

And it was getting more and more people to buy more and more stuff,

and that there are precious few examples of businesses that have turned into this kind of annuity model where you just monetize a very large installed base.

And I think that's precisely where that the debate over the stock is at at this moment.

So Apple loves to trump at this number that the active installed base is over a billion customers.

So you start to do a little bit of math. You say if something over a billion customers is willing to re-up and buy a new Apple product,

at a price of say 500 or 600 dollars every say 2 or 2.5 years,

it's easy to get to a sales line on Apple's profit and loss statement of 200 billion, 250 billion,

in other words, right where we are now.

So if you can just keep people buying, renewing again and again, you have an immensely profitable company that could be sort of the ultimate value stock.

And I guess the ultimate test of that will come later on this year when we get the much anticipated iPhone7

and we'll see if that reinvigorates the momentum.

Rob, thanks very much.