Technology giant Apple (AAPL:NASDAQ) saw its growth credentials fall under the microscope after reporting fourth quarter financial results (2 November) as its sales declined for a fourth straight quarter, the longest slide in more than two decades.

The Cupertino colossus may have topped forecasts in the three months to 30 September but that did little to offset growing worries that iPhone 15 simply isn’t going to provide the growth bump investors were hoping for. The stock tumbled as much as 5% in after-hours trading, although the subsequent recovery will settle the nerves of investors.

At $179.23, Apple share are now higher than where they closed ahead of the results ($177.57).

Apple is important to every investor, so wide is its ownership. As the world’s largest listed company, it makes up substantial stakes in any global, US, and growth-themed ETF and is widely held by lots of active funds and is owned directly by millions of retail investors all over the world. It is also Warren Buffett’s biggest bet, making up nearly half (47.5%) of Berkshire Hathaway’s (BRK.B:NYSE) portfolio.

So, when the tech giant said current quarter sales (to 31 December) would grow at a similar rate to last year, implying revenue growth of around 5%, it caused a few jitters. That was a tally that fell shy of Wall Street forecasts and compounded revenue declines as China demand weakens.

Analysts were quick to add context, flagging that the deceleration of iPad, Wearables and Accessories were to blame, rather than significant flagship iPhone sales.

‘Fears of iPhone’s share loss in Mainland China to Huawei seem overblown, when iPhone likely gained share in the quarter to September,’ Yang said. ‘We expect investor concerns over China share loss to mostly dissolve heading into full year 2024.’

The analyst said the results and forward guidance were solid given a ‘very tough macro backdrop’, adding that he continues to favour Apple’s long-term growth potential and unchallenged market positioning.

Apple’s profitable service business also continues to shine, making 16% more revenue in the September quarter than the same time last year, thanks to hardy App Store spending, revamped iCloud plans, and a steady flow of AppleTV+ subscriptions, which helped pull up profit margins.

‘Apple’s active installed base for devices hit a record high along with iPhone installed base hitting records,’ pointed out Goldman Sachs analyst Michael Ng.

‘iPhone installed base continues to compound, with the iPhone active installed base reaching a record and benefitting from a record number of switchers in full year 2023 driven in part by expansion into emerging markets and a growing installed base in Apple Watch, Mac, and iPad,’ Ng concluded.

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