Other markets making up for China

As mentioned, China was Apple's biggest sore spot last year, but the sales situation there seemed to stabilize over time. It's still not quite what it used to be, though: The Greater China region accounted for $13.58 billion in this quarter, which really isn't that much more than it generated for Apple during last year's bum quarter. Instead, more established markets like the Americas and Europe did the lion's share of Apple shopping over the past three months -- the people in former spent more than $4 billion more on Apple products than it did the year before, while folks in Europe spent about $3 billion more. While that shopping shift worked out to Apple's benefit for now, you can bet that it won't give up on currying favor with Chinese consumers any time soon -- the upsides are just too good.

With all that said, we might see Apple's economic relationship with China remain tense because of a hot news topic. A Nikkei report published this past October suggested Apple was leaning on manufacturing partners to ramp up production of the iPhone 11 and a new, lower-cost iPhone expected to debut this Spring. Those plans, however, might be derailed by a troubling coronavirus outbreak that prompted the Chinese government to enact travel bans and quarantine millions of citizens. The impact on these infections on China's economy, and particularly its manufacturing sector, remain to be seen.

What about services?

As mentioned earlier, Apple's fortunes still rise and fall because of the iPhone, but it's working on becoming less reliant on smartphones for success. Tim Cook noted in the earnings release that Apple's services business also hit an all-time record, raking in a total of $12.7 billion. He also added on the customary earnings call that just about every Apple service, from iCloud to the App Store saw double-digit growth. In other words, Apple's work is working... if perhaps not as fast as the company would like.

At this point, it's hard to say what -- if any -- ceiling to expect for Apple's services revenue. That's especially true when you consider that one of the company's flagship offerings -- Apple TV+ -- isn't fully represented in today's results. The streaming service costs $4.99/month, but Apple offered a year's worth of access for free to anyone who purchased a new iPhone, iPad, Apple TV, iPod Touch or Mac beginning in 2019. The company could be looking at a significant uptick in services revenue once those free accounts convert into paid ones — that is, unless streaming fatigue sets in and people cancel Apple TV+ before their free years are up.

In any case, Apple's earnings call is happening right now, so stay tuned for updates as Tim Cook and CFO Luca Maestri dig deeper into today's news.