Shares in Apple Inc (NASDAQ: AAPL) dropped 6.3% on Wednesday, after the technology giant reported its first fall in quarterly revenue since 2003 with sales of iPhones slipping. Revenue of $50.56bn for the quarter came in 13% down on the $58bn recorded a year previously, with the 51.2m iPhones sold representing a 16% fall on the 61.2m sold this time last year.

Apple shares have slipped to $95 at the time of writing, taking the price down 26% over the past 12 months, and dropping the gain over the past five years to 91%.

And we now hear that billionaire investor Carl Icahn has sold all his Apple shares, having owned 53m of them at one point last year. He told CNBC that he’s sold the lot.

Chinese slowdown?

Mr Icahn is, apparently, worried about Apple’s future in China, surely the world’s biggest market for future technology sales, with fears of increased government interference in what passes for a free market in the country being seen as a serious potential hurdle. The control-freak government’s recent edict in March led to the closure of Apple’s iTunes and iBooks services, as all web content accessible in China must now be stored on servers within the country.

Apple says it hopes to be back online soon, presumably by capitulating to the Chinese demands, but is it the thin end of a wedge that could see Western companies slowly squeezed out of China? It’s possible, even though the lure of the yuan provides a much stronger pull to most than any ethical considerations. But Apple has already made it clear that it will face down attempts from law enforcement agencies in the US to gain access to confidential material, and it’s entirely possible it could face an anti-encryption stance from the Chinese authorities in due course.

But against that, Apple does most of its manufacturing in China, and that’s something the country won’t want to lose.

How much cash?

And Apple’s fundamentals still look very strong. Apple shares are currently on a P/E of around 10, which is less than half the average P/E of the NASDAQ 100, and they look even cheaper compared to the S&P 500. Apple also has more than $200bn in cash reserves (some of it in longer-term investments and not quickly to hand, but it’s big dollars however you look at it).

What about that first fall in quarterly revenue since 2003? What’s truly remarkable is that, in all that time, it’s only happened once! Most of Apple’s rivals would love to be in that kind of position. Technology and growth investors so often come to expect their companies to keep on beating expectations, and they can pounce on a single failure as a portent of doom. But the assumed alternative of expecting any company to always grow every quarter and never falter… well, that’s a pretty dumb way to invest.

Unreal expectations

And the fall in iPhone sales, doe sit mean the device has reached a sales plateau? The most recent quarter came after a phenomenal year that was crowned by the iPhone 6, and such record-breaking product releases are very likely to be followed by a lull — iPhone sales are actually up more than 15% over the same period two years ago.

No, much as I respect Carl Icahn’s investing prowess, I don’t see any need to panic and sell Apple shares now. In fact, they still look good value to me.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.