China has been one of Apple's most reliable strongholds during its historic stretch of technology dominance. Even when sales began to level out in the U.S., Europe, and Japan, China was a buffer, promising a massive market of newly middle-class customers looking for a high-end, brand-name smartphone. Sales in Greater China, which also includes Taiwan and Hong Kong, grew 84 percent to $58.7 billion in 2015, making it the company's second-biggest market after the U.S. Apple Chief Executive Officer Tim Cook showered the region with praise at the time for its importance to the company's future.
Apple's reliance on the country is now being put to the test. On a conference call with analysts after its Tuesday earnings report, Cook said the company is beginning to see "economic softness" in the region, particularly in Hong Kong. China is no longer able to offset sluggishness elsewhere or counter the broader slowdown in the global smartphone market. Even with the Chinese New Year shopping season approaching, Apple is projecting its first quarterly sales decline since 2003.