Apple’s services division fell short of analysts’ revenue expectations despite Apple reporting record hardware sales and more than 1.5 billion paid subscriptions. The miss, alongside weaker results in China, sent its shares down by more than 4% in after-hours trading, highlighting pressure on a business increasingly important to Apple’s growth.

Services revenue reached $30.74 billion in the fiscal third quarter, below the $31.22 billion forecast. Apple cited foreign exchange rates as the main factor, but also pointed to slower mobile gaming and App Store payment-rule changes, including a US court order allowing developers to take payments outside Apple’s commission system; the App Store nevertheless set a June-quarter revenue record.