Apple CEO Tim Cook has sought to assure investors that iPhone demand remains strong in China, where it’s grappling with the rise of Huawei Technologies and an increasingly uncertain business environment for US firms.

After Apple posted less revenue in China than some analysts projected last quarter, Cook blamed weakness in its Mac and iPad businesses. The company also pointed to currency fluctuations, which reduced the value of money generated in the region.

Overall revenue in greater China declined 2% from the year-earlier period — a steeper drop than Apple experienced companywide. And Apple shares declined more than 3% in late trading Thursday.

But the iPhone continued to make inroads in the market, Cook said. That included notching a revenue record for mainland China during the quarter. The various iPhone models account for the four top-selling phones in urban China, he said.

“China is an incredibly important market,” Cook said during a post-earnings conference call with analysts. “And I’m very optimistic about it.”

Apple investors have grown skittish about the iPhone in China since the country widened bans of US technology in government workplaces. Shenzhen-based Huawei also just introduced a new model that is challenging the iPhone. And iPhone assembler Foxconn is under investigation by Chinese authorities on unspecified probes, casting another cloud over the business. On the call, Cook didn’t face any direct questions from analysts about the situation.

Manufacturing hub

The issues are central to Apple’s business. The iPhone is its flagship product, generating roughly half its revenue, and China is its biggest international market. The country also still serves as Apple’s manufacturing hub, even as the company shifts more production to India and other locations.

The iPhone 15 went on sale on 22 September — only about a week before the quarter ended — so the latest results only provide an early sense of how the device is doing. Investors will get a clearer picture when Apple reports its holiday results early next year. On Thursday, Apple projected flat revenue overall for the December quarter — a sign potentially that the Chinese market remains a question mark.

Read: Apple faces threat from resurgent Huawei

If the overall China smartphone market is contracting — as analysts have said — Apple’s results suggest it’s winning market share, Cook said. He also touted that the company is opening a new store in China this week. It’s coming to Wenzhou in the Zhejiang province and will be the company’s 46th in the region.

The Cupertino, California-based company added that its services business also enjoyed record sales in the region.