Apple's Next China Challenge Comes From Local Smartphone Rivals

Toward the end of last year, Apple scored two big breakthroughs in Asia. NTT Docomo, the No. 1 mobile operator in Japan, finally reached a deal with Apple in September to sell the iPhone in the world’s third-largest economy. And then China Mobile, the leading operator in the world’s second-largest economy, at last came to terms with Apple in December.

Those deals came too late in the year to have much of an impact on Apple’s 2013 earnings but should provide a boost to sales this year—and as we saw from Apple’s earnings and market-share announcements yesterday, the company may need the lift. It sold a 51 million iPhones in the final quarter of 2013, a record high that fell short of the 54.7 million units analysts had expected. And Apple forecast that revenues in the current quarter would come in from $42 billion to $44 billion, while analysts were expecting $46.1 billion.