As Apple tries to sustain its growth, its success in China, the world's largest smartphone market, is becoming even more crucial.

Apple's shares tumbled more than 10% in after-hours trade in the U.S., as the company's earnings for the holiday quarter through December disappointed investors.

The sales of the iPhone, which include both the iPhone 5 and older models, came in at the low end of analysts' expectations, while the company's revenueguidance for the second quarter was below analysts' forecasts, through Apple is known to give conservative forecasts.

Some analysts have said that for Apple to regain its growth momentum, the company needs a more aggressivestrategy for emerging markets, or more specifically for China, where the market for smartphones has been expanding more rapidly than anywhere else. In China, demand is particularly robust for inexpensive phones that run on Google Inc. GOOG +5.50%'s Android operating system, sold by many Chinese handset makers as well as South Korea's Samsung Electronics Co. 005930.SE -1.09%

But Apple says it's already enjoying strong growth in China. During the earningsconference call with analysts, Chief Executive Tim Cook said that Apple's revenue in Greater China rose 60% from a year earlier to $7.3 billion in the quarter.

'We saw exceptional growth in iPhones, into the triple digits,' Mr. Cook said. He said that the company has been quickly expanding its sales channels in China, including the number of Apple retail stores. 'This isn't nearly what we need, we're not even close to that, but we're making great progress,' he said.

In China, a big missing piece for Apple is China Mobile Ltd. 0941.HK -1.32%, the biggest local telecom carrier that doesn't yet sell the iPhone. Earlier this month, Mr. Cook met China Mobile Chairman Xi Guohua in Beijing and discussed cooperation, stirring hopes that the world's largest mobile carrier may soon start offering the iPhone.

Earlier this month, the Wall Street Journal reported that Apple is working on a lower-end iPhone that could launch as early as this year.

One possible challenge for Apple in China is that low-priced Android-based phones are getting better in terms of quality. A report from CLSA in late November showed that many smartphones sold at about 1,000 yuan ($160) came with higher-resolution screens, better cameras and more powerful processors than phones at that price point did a year earlier. 'The scary implication here is that these phones do not differ greatly in terms of quality and performance' from higher-priced branded smartphones, the CLSA report said.

Juro Osawa

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• missing [´misiŋ]   a.缺掉的；失踪的   (初中英语单词)
• cooperation [kəu,ɔpə´reiʃən]   n.合作；协作   (初中英语单词)
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