China seemed to be the topic on Wall Street analysts' minds during Apple's earnings call on Thursday.
Apple CEO Tim Cook was asked multiple questions about demand for the company's products in China during the earnings call, amid reports that iPhone 15 sales were off to a slower start amid increased competition from rival Huawei and increasing tensions between the US and the Chinese government, which reportedly banned government officials from using iPhones.
Cook said he's "very optimistic" about the company's longterm prospects in China's market, and pointed to record iPhone revenue in the last quarter, which ended September 30, though he declined to talk much about what demand for the iPhone 15 was like in the region in the current quarter. Apple stopped issuing formal next-quarter guidance during the pandemic and instead mentions some data points during the earnings call.
Apple posted its fourth straight quarterly decline in overall revenue, though overall iPhone revenue grew and its services revenue hit a record high.
"In the September quarter, we set an iPhone record revenue record in China and we're very proud of that," Cook said. "Over the long term, I view China as an incredibly important market and I'm very optimistic about it," he added.
Apple's quarterly revenue from the Chinese market, which saw a slight year-over-year drop, came in under Wall Street expectations. Revenue from China hit $15.1 billion last quarter compared to analyst expectations compiled by Bloomberg of $17 billion.
The tech company is dealing with an unpredictable market for the iPhone in China. The Chinese government has reportedly imposed bans on the Apple smartphone for some government employees. It has also launched a tax investigation into Foxconn, the main supplier of Apple's iPhones.
The tech company also faces stiff competition in the country from Huawei Technologies, which recently released a new smartphone that has been a success in China.
And there are already some signs the iPhone 15 may not be performing well in China. Counterpoint Research analysts in October told Bloomberg in October that they estimated sales of the iPhone 15 in China were down 4.5% during the smartphone's first 17 days of sales, compared to the iPhone 14 during the same period. Market research firm GfK also told the publication that it estimated sales of the iPhone 15 were down 6% in its first month on the market in China.
Apple share were down more than 3% in after-hours trading on Thursday.
