Apple has posted its third successive quarter of declining iPhone sales and forecast smaller than expected profit margins over the Christmas season even as it projected record sales.
The world's most valuable publicly traded company said improved sales from China were around the corner, despite revenue falling almost 30% from the country in the latest quarter.
It said sales so far to India have only scratched the surface.
But a slight miss on fiscal fourth-quarter revenue and a projection of gross profit margins a little behind analyst targets reflected broader concerns that Apple may have lost its tech superiority, even with the refreshed iPhone 7.
Apple's chief financial officer Luca Maestri told Reuters it was "impossible to know" if there was any effect yet from rival Samsung Electronics halting production of its fire-prone Galaxy Note 7 phones earlier this month.
He also said that Apple was "supply constrained" and selling all the smartphones it could make.
Apple said it sold 45.51 million iPhones in the three months ended September 24. That beat the average analysts' estimate of 44.8 million, according to research firm FactSet StreetAccount.
Revenue fell 9% to $46.85 billion, just below Wall Street targets, according to Thomson Reuters I/B/E/S.
Apple forecast revenue of $76 billion to $78 billion for the current, Christmas-dominated quarter, ahead of the consensus estimate of $75.08 billion.
If it hits that estimate, this quarter would be Apple's biggest on record by sales, ahead of the $75.9 billion revenue it posted in the year-ago period.
However, Apple offered a conservative outlook on profit margins, 38-38.5% compared to expectations of nearly 39%, analysts said.
Apple is still optimistic about its business in China, the company's CFO said.
While gross domestic product growth in the country has slowed, the economy is still growing, the middle class is expanding and smartphone ownership remains low, he said.
Maestri said high demand for Apple's newest iPhones made the company confident about results in the first quarter.
The company said itsnet income fell to $9.01 billion, or $1.67 per share in the quarter from $11.12 billion, or $1.96 per share, a year earlier. That beat the average estimate of $1.66 per share.
Apple's fortunes are strongly tied to the success of the iPhone, which accounts for two-thirds of its revenue.
Chief executive Tim Cook also said on a call with analysts that India was poised to boom in smartphone sales as a more powerful 4G cellular network was put in place this year and next.
He also hinted at potential future areas of business, commenting that media content creation and ownership was a great opportunity.
Cook declined to say whether Apple was working on a car, as has been widely reported, but he called the industry "interesting."
Apple also admitted that it was caught offguard by how many people want to buy its biggest smartphone, the iPhone 7 Plus, and the miscalculation may hit profits this Christmas season.
The technology leader is not sure it can make as many units of the iPhone 7 Plus as consumers want in time for the Christmas shopping rush, Apple's chief executive Tim Cook told analysts last night.
It will manage to make enough of the smaller iPhone 7s,though, he said.
Demand was strong "particularly on the iPhone 7 Plus versus our forecast going into the product launch," Cook said.
The California-based company unveiled its newest iPhones on September 7.
The 5.5-inch (14 cm) Plus model is the first iPhone to have a dual camera on the back that lets users take better portrait shots and zoom in from further away.
Apple is still getting to know how consumer interest varies for larger and smaller phones, having launched two competing sizes only in 2014.
