Apple has released its earnings for its first fiscal quarter of 2019 that ended December 29.

The top-line results: $84.3 billion in gross revenue, a 5 percent drop from the year-ago period — well below early market consensus of $93 billion. Operating income slumped 11 percent to $23.3 billion.

iPad sales grew 17 percent to $6.7 billion while Mac revenue jumped 9 percent to a record $7.4 billion. Sales of other products, such as the HomePod, Apple Watch, AirPods and Beats-branded products, also grew by a third to $7.3 billion. The ever-so-key services division clawed up 19 percent to $10.9 billion in earnings.

But the sole laggard to the business was iPhone revenue, which plummeted 15 percent to $52 billion. Upgrades slowed due to the company’s discounted battery replacement program in the wake of its performance throttling debacle, a strong US Dollar detracting from foreign purchases and fewer network subsidies and promotional activities — the company blames the latter factor in Japan on new regulations, taking the proportion of subsidized iPhone purchases from about three-quarters to less than half.

CEO Tim Cook called the latest iPhones — the XR, XS and XS Max — the “best iPhones we’ve ever shipped,” going on to list features like their full-body displays and camera performance. CFO Luca Maestri cited data from 451 Research, saying that 99 percent of customers who bought any of the above phones were satisfied with their purchase.

As alluded by Cook in a letter to investors earlier this month, China proved to be the company’s softest market with a 27 percent annual slide to $13.2 billion. iPhone, iPad and Mac sales all fell in the country. First-time device buyers did grow for the season. But ultimately, macroeconomic issues took most of the blame — though the executive believes that Apple’s fundamentals in innovative products will outgrow those issues.

Apple is positive on services with record revenue in the quarter with a device base of 1.4 billion. Apple Music now has 50 million subscribers and the App Store saw big revenue splashes during Christmas week and New Year’s Day. App subscriptions are now forecast to total 500 million in fiscal 2020. ComScore analysis finds Apple News as the most trafficked news app in the United States.

Other major regions saw marginal losses and gains leading to new records in the Americas (including the United States), Europe and South Korea.

Apple has introduced new metrics for investors to track: product gross margin, currently marked at 34 percent, and services gross margin, now at 62 percent. Overall gross margin was down by a fraction of a percent. Install bases for certain products such as iPhones will be given out on a periodic basis.

Looking to the winter quarter, Apple’s second quarter outlook is for revenue between $55 billion and $59 billion with grossmargin around 37 or 38 percent. Other factors look to remain steady with operating expenses expected between $8.5 billion and $8.6 billion and other income of $300 million.

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