Apple’s revenue declined in a holiday-season quarter for the first time since 2001 though further weakness in iPhone sales was offset by growth in other areas such as wearables.

For the first quarter, Apple on Tuesday reported total revenue fell 5% to $84.3 billion, with sales of iPhones — its main revenue stream — down 15% to $51.98 billion from the year-ago period. Earnings rose 7.5% to $4.18 per share.

The revenue shortfall did not come as a surprise to Wall Street since Apple had lowered its forecast for the quarter on Jan. 2 due to the economic slowdown in China and diminishing demand for new iPhones.

Apple executives blamed the iPhone sales decline in part to consumers hanging on to their old devices longer before they make an upgrade. A recent Business Insider SurveyMonkey poll found that 1 in 3 iPhone owners in the United States has not upgraded to a new iPhone because prices are too expensive or because they don’t feel the new models have enough must-have new features.

But The New York Times said after years of expansion and record-setting profits, Apple “appears to be entering a period of vulnerability.”

“While it has had some success with new products like the Apple Watch, the company has not found another product with the global impact of the iPhone, which was introduced more than a decade ago,” The Times said. “Apple is also uniquely vulnerable to slowing consumer demand in China, as well as potential tariffs on Chinese-made products.”

In China, where consumers appear to be opting for less expensive smartphones from domestic manufacturers, the company saw almost $5 billion less in first-quarter revenue than the year-ago period.

Apple doesn’t see an improvement in the current quarter, forecasting that revenue will fall by as much as $6 billion, or 10%, from the same period last year.

The first-quarter results, however, did include a record of $7.4 billion in revenue for Apple’s Mac computer lineup. In the Wearables, Home, Accessories product category, which was boosted by burgeoning Apple Watch and AirPod sales, revenue jumped 25% to a record $7.3 billion.

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