Apple’s shares fell almost 3% in after-hours trading after the company released a Christmas quarter sales estimate that fell short of Wall Street’s projections due to the lacklustre demand for iPads and wearables.

Tim Cook, the company’s CEO, emphasised that the new iPhone 15 models were performing well in China in an effort to allay Wall Street concerns that Apple was losing market share to Chinese smartphone vendors and a resurgent Huawei. Apple’s revenue from China decreased 2.5% overall in the fiscal fourth quarter that concluded on September 30, but Cook claimed that after deducting foreign exchange rates, the revenue increased.

Sales for the current quarter, which includes the Christmas holidays and when Apple usually has its highest sales of new iPhone models, will be comparable to the prior year, Chief Financial Officer Luca Maestri told analysts on a conference call. Wall Street had anticipated a 4.97% increase in revenue to $122.98 billion.

Apple’s stock, which has increased 37% so far this year, fell 3.4% after hours in line with expectations.

Despite the fact that this year’s holiday quarter has one fewer week of sales than the previous year’s, Maestri stated Apple anticipates greater iPhone sales for the fiscal first quarter.

“I’d say it was surprising to see how confident Tim Cook was on future China performance given the many potential geopolitical challenges that we know exist for that market,” said Bob O’Donnell, chief analyst at TECHnalysis Research.

Apple surprised Wall Street with its fiscal fourth-quarter sales and earnings on Thursday. The company attributed its success to an increase in iPhone sales and a $1 billion increase in services income, which more than made up for the significant declines in Mac and iPad sales.

Cook stated that there are supply issues with the company’s latest high-end cellphone models, the iPhone 15 Pro and Pro Max smartphones.

Though it has fared better than many of its competitors during the worldwide smartphone collapse, the Cupertino, California-based corporation is facing an uneven rebound in China, a critical market.

“While we believe investors should breathe a sigh of relief because sales and profits both exceeded expectations, the upside was small and we were concerned to see weak sales from China,” DA Davidson analyst Tom Forte said.

LSEG data shows that although Apple’s latest quarter sales decreased by almost 1% to $89.50 billion, they were still higher than expert projections of $89.28 billion. About 11% more money was made net. LSEG reports that the profit per share of $1.46 exceeded consensus estimates of $1.39 per share.

This year, Huawei Technologies is returning to the smartphone market with new models that run on semiconductors made in China, giving Apple more fierce competition after the company was virtually kept out of the market for a number of years due to trade restrictions imposed by the US government.

From $15.47 billion in the fourth quarter of last year to $15.08 billion this quarter, Apple’s sales in China decreased during the period. Cook stated that Apple’s sales and services revenues from the iPhone drove the company’s growth in China year over year, even after taking foreign exchange rates into consideration.

“In mainland China, we set a quarterly record for the September quarter for iPhone,” Cook said. “We had four out of the top five best-selling smartphones in urban China.”

Cook declared that Apple was “working hard to manufacture more” Pro Max and 15 Pro iPhones. “We do believe that later this quarter, we’ll reach a supply-demand balance.”

Right now, Apple’s best-selling product is still the iPhone. LSEG data shows that fourth-quarter sales were $43.81 billion, which was in line with analyst estimates.

“We expect its performance to further improve in (Apple’s fiscal first quarter) as the supply issues of the top Pro and Pro Max models will be resolved by then,” said IDC analyst Nabila Popal. “Demand across regions continues to show preference for the most premium models, and we expect an even larger proportion” of those models this year than last year, she said.

In the upcoming year, the personal computer market is also anticipated to do better. This week, Apple released new Mac computers.

Nevertheless, compared to forecasts of $8.63 billion and $6.07 billion, respectively, Mac sales fell by a third to $7.61 billion while iPad sales fell 10% to $6.44 billion.

LSEG data shows that Apple’s wearables division, which includes the Apple Watch and AirPods, saw a 3% decline in sales to $9.32 billion, falling short of projections of $9.43 billion.

Sales of Macs and iPads have been dropping for Apple for a number of quarters, and the fourth quarter saw this trend continue.

Compared to analyst projections of $21.35 billion, sales in Apple’s services division, which includes Apple TV+ and recently concluded a partnership with global soccer player Lionel Messi, increased 16% to $22.31 billion.

(Adapted from ThePrint.in)