On Thursday, tech giant Apple reported its fiscal first-quarter earnings that surpassed expectations for both revenue and earnings. However, the company also experienced a significant decline in sales in China, one of its most crucial markets. As a result, Apple shares fell over 1% in extended trading.

According to the data, Apple's earnings per share (EPS) stood at $2.18, exceeding the estimated $2.10. Similarly, the company's revenue reached $119.58 billion, surpassing the estimated $117.91 billion. Across its product lines, Apple's iPhone revenue reached $69.70 billion, slightly higher than the estimated $67.82 billion.

While the sales growth in most regions was positive, Greater China recorded a notable decline of nearly 13% compared to the previous year. This decline raises concerns about the demand for Apple products in its third-largest market, which faces fierce competition from local firms such as Huawei.

Despite the challenging situation in China, Apple's CEO, Tim Cook, remains optimistic. He mentioned that the decline in sales can partly be attributed to the strong US dollar against the Chinese yuan, which affected the reported figures. Cook also emphasized that Apple's iPhone was among the top-selling smartphones in urban China.

Apple's services business, including subscriptions like Apple Music and payments from Apple Pay, witnessed an 11% growth during the quarter, generating $23.11 billion in revenue. However, it fell slightly short of estimates. Investors closely monitor the growth of Apple's services business, which plays a significant role in the company's overall performance.

The company reported a net income of $33.92 billion for the quarter, representing a 13% increase compared to the same period last year. Apple's gross margin continues to rise, with a notable 45.9% in the December quarter.

The company also highlighted its active device count, which reached 2.2 billion devices in use, up from 2 billion devices during the same time last year. This metric is significant as analysts often use it to forecast Apple's services growth.

In terms of product performance, Mac sales grew by nearly 1% to reach $7.78 billion, meeting estimates. This positive result marks a recovery for the product line, which experienced a significant decline in the previous quarter. However, iPad sales continued to slump, falling 25% to $7.02 billion and slightly falling short of expectations. Apple attributed this decline to a challenging comparison with the previous year's launch of the iPad Pro and 10th generation models.

Apple's wearables business, including AirPods and Apple Watch, also faced challenges during the quarter, declining by 11% year-over-year to $11.95 billion in sales. Despite this setback, it exceeded Street estimates. It's worth noting that Apple faced a patent dispute with medical device company Masimo, leading to the temporary removal of the newest Apple Watches from stores in December.

Looking ahead, Apple did not provide guidance for the current quarter ending in June. However, management typically offers some insights during calls with analysts to indicate their outlook for the upcoming quarter.

Overall, despite the decline in the Chinese market, Apple's fiscal first-quarter earnings showcased strength in other regions and various product lines. The company will continue to navigate challenges and leverage its strong ecosystem of services and products to drive growth in the future.