Thanks to strong iPhone sales and its ever-growing services business, Apple reported better-than-expected results for its second fiscal quarter on Thursday. The company posted $24.2 billion in net profit on revenue of $94.8 billion for the three months ended April 1, 2023, beating expectations on the top and bottom line.

“We are pleased to report an all-time record in Services and a March quarter record for iPhone despite the challenging macroeconomic environment,” Apple’s CEO Tim Cook said, as the company’s services revenue climbed to $20.9 billion for the quarter. More importantly though, Apple defied headwinds in the smartphone market, reporting an admittedly modest increase in iPhone revenue in a quarter where global smartphone shipments declined by 14 percent year-over-year.

According to estimates from Counterpoint Research, Apple’s iPhone shipments were down 2 percent to 58 million in the past quarter, which was by far the smallest decline among the top five brands, with main rival Samsung seeing shipments drop by 19 percent year-over-year. “Apple outperformed the market due to several factors,” Jeff Fieldhack, research director at Counterpoint said, citing the stickiness of its ecosystem, users’ willingness to spend more for longer-lasting devices and its popularity among Gen Z consumers as key reasons for the company’s ability to “weather economic and other fluctuations better than its rivals while enjoying unflinching loyalty.”

In the past three months, that ability translated to a global market share of 21 percent for Apple, second only to Samsung. Looking beyond sheer volume yields an entirely different picture, however, as Apple is winning where it really matters. Thanks to its high average selling price and its healthy profit margins, Apple captured 50 percent of global smartphone revenues and more than 80 percent of the industry’s profits in the first three months of 2023.

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