Amid a tough year for Apple that saw the company’s first revenue decline since 2001, investors are particularly nervous about the steep drop in sales in China. And that has them turning their eyes toward opportunities for Apple in India.

Success in China has been a big story for Apple in recent years, particularly the wildly enthusiastic embrace of the iPhone 6 and iPhone 6 Plus. But this past year saw sales drop 17 percent, compared to an 85 percent increase the previous year.

In an earnings call with analysts yesterday, Apple executives said they remain optimistic about China, noting that over the past two years, revenue is still up 52 percent. Apple CEO Tim Cook said that the company felt the drop was partially due to those big iPhone 6 sales, coupled with an upgrade cycle that Apple hadn’t understood until it was too late.

“When that upgrade rate in fiscal year 2016 returned to a more normal upgrade rate, which would be akin to what we saw with the iPhone 5S as a point, it had further to fall,” Cook said. “And so that’s the main reason in our view that you see a difference. Now, that spun or created another issue for us because we didn’t forecast that accurately.”

Apple CFO Luca Maestri said the company expects better results in China for this current quarter, thanks to the new iPhone 7 and 7 Plus, though his statement remains a bit cryptic.

The new phones “give us confidence that our December quarter performance in China will be significantly better on a year-over-year basis than our September quarter results, even as we lap the all-time record period from a year ago,” Maestri said.

September sales in China were down 30 percent. So, does that mean they will fall, but by less than 30 percent? And by “lap,” does he actually expects sales in China to be up? Or is it just that Apple is moving past a record-setting quarter that makes comparisons difficult?

In general, Apple still has big faith in China. In the past year, the company has announced a sizeable investment in ridesharing company Didi and plans for two R&D centers in China. And Cook says that over the very long term, the demographic changes in China still look favorable.

“We continue to see a middle class that is booming there,” Cook said. “There might be some sort of new normal in the economy, but a new normal there is still a good growth rate. And so with the number of middle class…people growing into the middle class and the LTE adoption rate being still fairly low, around 45 percent, 50 percent, or so, then I think we continue to have a really good opportunity there, and so we continue to focus significantly in China.”

Still, Apple faces tough competition from a wide range of Android device makers that have cut into its China market share. And with China’s economic outlook uncertain, many investors are now wondering if India might end up driving more consistent growth for Apple in the coming years.

In the earnings call, Apple highlighted the fact that iPhone sales in India were up 50 percent in fiscal year 2016. Cook said the company certainly sees a big opportunity in India.

“On India, I think it’s important to look not only at per capita income, which may be what you’re looking at, but sort of look at the number of people that are or will move into the middle class…over the next decade,” Cook said on the earnings call. “And the age of the population…if you look at India, almost 50 percent of the population is under 25. And so you have a very, very young population.”

Cook said he believes the wireless networks are finally coming online that will help Apple’s sales. The company noted that Reliance Jio, a large carrier, is investing heavily in rolling out 4G in 18,000 cities and 200,000 villages. The carrier is offering a one-year free service contract to anyone who buys an iPhone.

“We believe we’re just beginning to scratch the surface of this large and growing market opportunity,” Cook said.

Later, he added:

The smartphone has not done as well in India, in general. However, one of the key reasons for that is the infrastructure hasn’t been there. But this year, or this year and next year, there are enormous investments going in on 4G, and we couldn’t be more excited about that, because it really takes a great network working with iPhone to produce that great experience for people. And so I see a lot of the factors moving in the right direction there. I also think the government is much more focused on the infrastructure and on creating jobs, which is fantastic, because you really need the kind of infrastructure and the technology to do that.

To the larger question of India vs. China, however, Cook said it’s hard to tell if the former can match the latter.

I think it’s clear that the population of India will exceed China sometime in probably the next decade or so, maybe less than that. I think it will take longer for the GDP to rival it, but that’s not critical for us to have a great success there. The truth is, there’s going to be a lot of people there and a lot of people in the middle class that will really want a smartphone, and I think we can compete well for some percentage of those. And given our starting point, even though we’ve been growing a lot, there is a lot of headroom there in our mind, and so we are working very hard to realize that opportunity.

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