There was quite a bit of discussion from Apple yesterday about their sales in China (you can see that in our liveblog from yesterday afternoon), and AppleInsider points out that Apple is changing priorities over there, from straight up sales to brand quality.
Tim Cook said yesterday that Apple has activated more than 200,000 iPhones since the release in China last year, and only in relation to the iPhone can anyone think that number could have been better. Apple is behind the pack in China -- there are a significant number of competitors over there, and unlike the market in the West, multifunctional smartphones have been popular for a long time already. But Apple recognizes the potential overseas, and Cook says the company does "...realize we must do well in these markets to continue to grow."
What changes can they make? Price for one -- Apple says that as a premium brand, they're going to have to tweak a little bit to fit into the lower-income middle class in China while still competing on user experience. Apple didn't say that they weren't happy with what's happening in China, but compared to other countries in Asia (Japan came out of last quarter with a 400% year-over-year growth), Apple has a little more work to do there.