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Apple beat Wall Street estimates in Q1 with strong sales and profit, fueled by the success of its iPhone lineup. However, China sales fell short of expectations, raising concerns about the market's future.
We did feel good about the plus 6% (revenue growth) for iPhone, Apple chief executive Tim Cook told Reuters in an interview. We had particularly strong double-digit growth on iPhone in emerging markets outside of China.
Apple's total installed base of devices reached 2.2 billion, a significant increase from the previous year. While the company continued to see growth in emerging markets, the competitive landscape in China remains a challenge.
China is the most competitive smartphone market in the world, and that hasn't changed.
Despite the overall strong performance, the miss in China is concerning as it could indicate the start of a longer downward trend. Apple's stock has also dropped in comparison to other tech giants like Microsoft, seen as leading in the artificial intelligence race.
The overall strength of iPhone 15 sales clearly reflected more pent-up demand for smartphones than expected, but the big miss in China is concerning as it could be the start of a longer downward trend there, said Bob O'Donnell, an analyst at TECHnalysis Research.