Apple reported strong demand for the iPhone 16 in its quarterly earnings report on Thursday, although overall sales in China fell slightly year-over-year. The company reported revenue of $94.9 billion, up 6% year over year, and earnings per share (EPS) of $1.64. The company’s profit easily beat Wall Street forecasts, with revenue of $94.4 billion and earnings per share of $1.60.

The company generated $46.2 billion in revenue from iPhone sales, up from $43.8 billion year over year. Revenue from the services division, which includes subscriptions, rose year-over-year from $22.31 billion to $24.97 billion in the fourth quarter.

The company also said it incurred a one-time charge of $10.2 billion resulting from the overturning of a European court ruling that required Apple to pay back taxes in Ireland.

The earnings report provides a first look at demand for the iPhone 16, which Apple released a few days before the end of the fourth quarter. According to an analysis by market research firm International Data Corporation, the launch of the latest iPhone should be a boon for Apple in China and allow the company to regain market share. Due to stiff competition from players like Huawei and Xiaomi, the company had dropped to sixth place among smartphone sellers in the last quarter.

In a statement, CEO Tim Cook touted the release of the company’s “best products yet,” which included the iPhone 16 and Apple Intelligence.

“And this week we released our first features for Apple Intelligence, setting a new standard for privacy in AI and expanding our offering as we enter the holiday season,” Cook said in a statement.

The company declined to elaborate on whether it expects Apple intelligence to drive demand for its products over the holiday season.

“We are still early in the cycle with many of the new products and features we are bringing to market,” said Luca Maestri, Apple’s chief financial officer. “We’re very excited about them, but it’s still early and the rollout of Apple Intelligence will happen over time, not across the world like we typically do with software releases.”

Apple has struggled with slowing demand for its other devices over the past year. Sales of its wearable devices like the Apple Watch and Airpods have declined for four straight quarters. Sales of the Vision Pro headset, Apple’s first new hardware product in nearly a decade, also failed to take off.

In addition to the latest information on demand for the iPhone 16, investors were looking for updates on the company’s slow rollout of its AI features called Apple Intelligence, which is included in the latest version of Apple’s iPhone operating system.

On Thursday’s earnings call, Cook said that in the three days since Apple Intelligence was released, consumers have downloaded the new iOS update 18.1 twice as fast as they downloaded 17.1 a year ago.

“There is definitely interest in Apple Intelligence,” Cook said.

Cook defended the company’s decision to take its time releasing a competitor to Google’s Gemini, ChatGPT and OpenAI’s Meta AI. In an interview with The Wall Street Journal, he said the company wanted to focus on developing the best AI assistant, not the first.

“We weren’t the first to do intelligence,” he said. “But we did it in a way that we thought was best for the customer.”

The basic version of Apple Intelligence, which some users received in a limited version, had some problems with intelligence information. According to multiple examples shared by users on social media, the AI ​​feature completely misinterpreted news alerts and relayed inaccurate summaries.

The company plans to roll out additional features in December and over the next few months, Cook said. On the earnings call, he hinted that future iterations could be much more advanced.

“I’m working on future versions of Apple Intelligence and it’s changing my life,” he said.

The company has not yet rolled out the feature in key markets such as Europe and China, where it still faces stiff competition. Apple is also facing some pressure in other parts of Asia. Indonesia banned sales of the iPhone 16 after the government said the company had reneged on its promise to invest more in the local economy.