This isn't a surprise. America is the only place where you can get away with selling a $1000 phone. Other markets like China, India, and the EU are super price-conscious and there's tough competition out there in the mid-range segment from Chinese manufacturers. Things that would be considered selling points in the US (iMessage, apple services, security, retail support, better versions of social media apps, long life of updates) may not always be as crucial in other regions due to both technical availability and cultural habits.
IMO Apple needs a cheap new $500 iPhone (all-new, not last year's model with a discount) for the international market.
The other big reason here is that people are holding onto their devices longer, smartphones in general have plateaued and the incentive to upgrade each year is way, way weaker than 2009-2012. A 6s+ or 7+ from 2015-2016 still works fine today, it gets updates, the camera is fine for daily use. Whereas the 4s, 5, etc became obsolete pretty quickly since critical features like LTE, 64bit SoC's, touchID, etc were still actively being developed
Also in this same earnings call they reported that the Apple Watch and services are growing at a crazy rate, so investors aren't worried. The company knows about smartphone ennui and is branching out into different sectors to keep the growth going