What's going on?

Apple kept the doctor away and its investors close on Tuesday, posting better-than-expected results for the last three months. The stock of the world�s most valuable public company duly swiped up 4%.

What does this mean?

Reports from some the world�s biggest chip manufacturers (which supply important parts for Apple�s smartphones) that demand for the flagship iPhone X was subdued were confirmed by Apple�s earnings report. The company only sold 3% more iPhones than in the same quarter last year, and a third fewer than in the last quarter of 2017 (remember, the iPhone X was only released in November).

The company�s services segment, on the other hand, bore serious fruit. The business line that includes digital content like Apple Music, Apple Pay and Apple TV grew its revenues by over 30% compared to this time last year � hitting its highest sales ever in a single quarter. This may help reassure investors that Apple�s notorious ecosystem can still lock in customers and generate predictable income, even as phone and computer sales slow.

Why should I care?

For markets: A stronger outlook and more buybacks buoyed the stock.

Apple�s outlook for its sales next quarter is already ahead of the market�s expectations. Thanks to a lower tax rate for bringing overseas money home, the company has increased its dividend by 16% and promised investors it will buy back another $100 billion of its own stock � in addition to the $210 billion it�s already in the process of doing so!

The bigger picture: Chinese competition is bobbing up.

Outside of the US, no country has more Apple stores than China [tweet this], where there are an estimated 100 million iPhone users. Apple�s sales last quarter grew by more than 20% in the region, which is home to competitors Huawei and Xiaomi. They�re gearing up to expand their battle with Apple into the US � and their lower prices may be why Apple is currently looking to produce more of its own hardware components in-house.