By Aaron Pressman
April 27, 2016

Apple reported results for the first three months of the year on Tuesday, and the numbers weren’t pretty. Sales declined for the first time since 2003 as revenue of $50.6 billion slid 13% from the same period a year earlier. Sales of iPhones slipped along with most of Apple’s other products.

Wall Street analysts quickly offered their views of Apple’s (aapl) future prospects. Here are some excerpts:

Anil Doradla, William Blair & Co.

We believe that there remain several positives in the story. We continue to believe that Apple is the market leader on the innovation front, and we do not believe that competitive threats will hurt the company’s market share. Second, the company’s balance sheet and cash generation continue to be very healthy and the company is returning capital to shareholders in record amounts.

Timothy Arcuri, Cowen and Co.

OLED on all new iPhone in ’17 creates a new “cycle of innovation” and we think sets up for an iPhone 6-like upgrade cycle next year on new design and much better battery life.

Steven Milunovich, UBS

Services revenue grew a strong 20% with the App Store accelerating at a well-above corporate average margin. Cook appeared to agree with our view that services’ main function is to create the ecosystem that allows Apple to charge premium hardware prices. Apple calls its OS’s (iOS, Mac OS) “platforms”—we agree though the App Store, Apple Pay, and Apple Music are secondary platforms to be monetized. Apple needs hardware hits to keep the installed base and services growing. A good start would be getting the one-third of the base still on a 4” phone to upgrade to the SE.

Brian White, Drexel Hamilton

Although Apple does not break out the Apple Watch, we estimate unit sales were between 2.5 million to 3 million in 2Q:FY16. Also Apple Watch expanded distribution to 60 countries and introduced bands in new colors for spring. On last night’s call, Apple indicated that Apple Watch outsold the iPhone during its first year on the market.

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Ben Schachter, Macquarie Capital

The bottom line is that AAPL needs new innovation either in its current categories or in entirely new products (car?) in order to drive consumer and investor excitement. There is value here, and based on the calendar, iPhone comps will get easier by December. Additionally, Services are clearly receiving more attention from the company and investors.

Laura Martin, Needham & Co.

iPhone units sales were 51.2 mm (better than our estimate of 50mm, and well above bear estimates). We view the tough [year over year] iPhone comps, strong currency headwinds, and $2 [billion]inventory drawdown as temporary issues, suggesting upside in [second half of fiscal year 2016]. We are buyers on weakness.

James Cordwell, Atlantic Equities

Despite these weaker near-term trends we continue to believe that Apple can return to growth in FY17. The strong sales in FY15 will result in an expanded body of iPhone customers eligible for an upgrade and we were encouraged that the replacement rate in the 6S cycle has been higher than in the 5S cycle, partly mitigating fears over upgrade rates lengthening. We also expect gross margin to rebound from the projected Q3 levels as the launch of the iPhone 7 should drive a mix shift back to higher-end models.

For more about the iPhone slump, watch:

Michael Walkley, Canaccord Genuity

iPad unit sales were slightly above our estimates, and overall iPad sales declined year- over-year and were impacted by overall slowing global tablet sales. Apple commented iPad and Mac channel inventory is within their targeted range during the March quarter. We believe the partnership with IBM should help bolster tablet sales to the still underpenetrated enterprise market over the next several years, and we are impressed Apple has now built a $25B enterprise business.

Andy Hargreaves, Pacific Crest Securities

Apple’s weaker-than-expected FQ3 (June) revenue and gross-margin guidance largely reflects poor demand forecasts that the company made early in the iPhone 6s cycle. The company over-filled the channel with high- end iPhone 6s units, and is now taking corrective action to clear the channel in front of the iPhone 7 cycle. While this has a clear negative impact on near-term results, it is largely backward-looking, in our view. Further, it does not change our view that replacement volume is likely to grow strongly in the iPhone 7 cycle, which should drive overall iPhone unit growth through F2017.

Andrew Uerkwitz, Oppenheimer & Co.

We are downgrading Apple to Perform as we believe that weaker performance seen in this quarter is likely to recur until 2017’s iPhone launch. We believe Apple won’t provide a compelling reason to upgrade until then, when the new iPhone adopts more VR-friendly features. Such belief leads to our more bearish outlook for the coming iPhone cycle (“iPhone 7″) and has us look past favorable longer term trends. We see the stock trading sideways while investors grapple with perceived slowing innovation and unit growth on the one hand, and massive cash generating, dividend paying, attractive valuation on the other.

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