Shares in Apple have fallen after the company announced lower than expected Christmas iPhone sales and a weak revenue forecast.
The figures come despite expectations that 2014 would be Apple's watershed moment in China.
A long-awaited deal with the largest carrier there was to have propelled it back toward the top ranks of its most crucial market, clawing back ground from rival Samsung Electronics.
Instead, the forecast for the March quarter raises questions of whether investors had over-estimated that arrangement, and broader concerns about flagging demand for smartphones and tablets in general.
The world's most valuable technology company said it sold a record 51 million iPhones in the three months to the end of December, but that was still shy of the 55 million or so that analysts had expected.
The company forecast sales of $42 billion to $44 billion this quarter, brisker than usual because of Apple's new deal to sell iPhones through China Mobile. But Wall Street had expected even more - $46 billion, on average.
Apple last night recorded sales of $57.6 billion in its December or fiscal first quarter, compared to expectations for about $57.5 billion.
Net profit was flat from a year earlier at $13.1 billion, or $14.50 a share, compared to estimates of $14.07.
Shares fell by 8% in overnight trade, and remained in negative territory after markets opened in New York.
The company's chief financial officer Peter Oppenheimer told a conference call that the March-quarter revenue outlook reflected the effects of a strong US dollar, and more balanced levels of demand and supply for iPhones at the start of 2014 than a year earlier, when demand outstripped available inventory.
In the December quarter, Apple recorded gross profit margins of 37.9%, roughly in line with expectations.
But it was the iPhone sales and revenue outlook shortfall that drew attention. The iPhone maker has been ceding ground to Samsung and other rivals in China, but investors hope its tie-up with the country's dominant mobile carrier will help reverse its fortunes in the world's largest mobile phone arena.
In the closely watched greater China region, which includes Hong Kong and Taiwan, revenue jumped 29% from a year earlier to $8.84 billion, bolstered by strong iPad sales and the iPhone's global launch in September, when China was included among launch countries for the first time.
In the less competitive tablet arena, Apple sold a record 26 million iPads globally in the quarter, in line with Wall Street estimates.
Oppenheimer told Reuters the company more than doubled sales of the tablet in mainland China during the December quarter, helping drive that milestone.
The iPod, which sparked the revival of Apple last decade, is now a waning product, selling just over 6 million in the quarter, less than half the year-ago tally.
"IPod sales declined by 52% year-over-year in the December quarter and we would expect them to continue to decline year-over-year in the March quarter," said Oppenheimer.
Longer term, investors continue to hope that Apple, which last came out with a revolutionary new device - the iPad - in 2010, has something up its sleeve for 2014. Speculation currently revolves around a smartwatch or even a long-rumoured TV product.
Others say Apple can use its huge iPhone and iTunes base to get into mobile payments or advertising.