Apple (AAPL) on Thursday introduced better-than-expected results for its fourth quarter, however an underwhelming outlook for Q1 despatched shares tumbling greater than 1% in afternoon buying and selling Friday.

While Apple’s newest outcomes weren’t precisely unhealthy — they beat on income, earnings, and iPhone gross sales — they didn’t engender a lot aid amongst traders who have been already cautious a few slowdown of iPhone gross sales in China. It additionally didn’t assist that This autumn marked the fourth straight quarter of year-over-year declines in general income, down 1% versus 2022.

And with Apple CFO Luca Maestri anticipating the corporate’s iPad and Wearables, Home, and Accessories companies to “decelerate significantly” from the September quarter, it might appear that Apple is going through severe bother.

But there have been a handful of constructive indicators within the firm’s report and first quarter steerage that would give the tech big a lift transferring ahead, together with its efficiency in India and an anticipated bounce in Mac gross sales.

India and rising markets get a lift

Apple has been investing an excellent deal in India over the previous a number of years. Not solely is the corporate leaning on the nation as a brand new manufacturing hub for its merchandise, together with the all-important iPhone, it’s additionally opened up its first bodily shops within the area in Mumbai and New Delhi.

According to UBS analyst David Vogt, whereas India accounted for simply 4% of complete iPhone sell-through within the 12 months previous to September 2023, unit gross sales have been up 31% within the nation. That’s in comparison with declines within the US, China, and Europe.

“We had an all-time revenue record in India,” Apple CEO Tim Cook stated throughout the firm’s earnings name. “We grew very strong double digits. It’s an incredibly exciting market for us and a major focus of ours. We have a low share in a large market. And so it would seem that there’s a lot of headroom there.”

According to Cook, Apple is banking on extra folks transferring into the center class and higher distribution within the nation as boons for its presence there.

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“I couldn’t be happier with how things are going at the moment,” he added.

It’s not simply India, although. Apple additionally launched new on-line shops in Chile, in addition to Vietnam, the place the corporate set new income data.

Mac gross sales to rebound

Apple’s Mac phase has been one among its largest laggards among the many firm’s numerous companies during the last a number of quarters. In This autumn of this yr, particularly, income fell 34% yr over yr from $11.5 billion to $7.6 billion. But issues could possibly be turning round.

During the corporate’s earnings name, Maestri particularly known as out the Mac enterprise transferring ahead, saying that he expects year-over-year efficiency to “significantly accelerate in the current quarter.”

That’s as a result of Apple simply launched its new M3 line of chips, in addition to its M3-powered MacE book Pros and that iMac. The methods ought to assist drive an uptick in gross sales, in comparison with the identical time final yr when gross sales have been falling.

It’s essential to additionally observe that Apple’s iPad and Mac income particularly have been stung by year-over-year comparisons that have been warped by manufacturing slowdowns and a subsequent bounce in gross sales throughout 2022. How lengthy the M3 chips will buoy Mac gross sales, nevertheless, stays to be seen.

Services remains to be a standout

While Apple’s {hardware} gross sales weren’t sufficient to knock anybody’s socks off, the corporate’s Services enterprise was a stable standout.

Revenue jumped from $19.2 billion in This autumn 2022 to $22.3 billion this yr. In truth, Services income rose every quarter final yr, a stark distinction to the remainder of Apple’s segments, which fell throughout numerous quarters.

“The Apple flywheel is alive and well, following a 20-year success story in which consumers buy one Apple product, fall in love, buy another product, add a service, upgrade, and repeat,” Deepwater Asset Management managing associate Gene Munster wrote in an investor observe.

Services has lengthy been seen as Apple’s greatest hedge towards falling iPhone gross sales, and with the declines during the last yr, Services has been a assist for the corporate’s margins.

For 2024, Vogt says he expects Services income to extend to $95.4 billion, 12% larger than 2023.

While worries nonetheless abound amongst traders as as to if Apple’s {hardware} segments will bounce again after a tough 2023, subsequent yr has a variety of potential alternatives forward, together with extra MacBooks operating Apple’s new M3 chips, and, importantly, the launch of the Vision Pro headset. And whereas that received’t be a quantity vendor out of the gate, it may goose numbers sooner or later.

Daniel Howley is the tech editor at Yahoo Finance. He’s been protecting the tech business since 2011. You can comply with him on Twitter @DanielHowley.

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