Apple has set a Q1 record for iPhone sales, but the figures have still managed to be a disappointment.

According to CNN Money, analysts on Wall Street expected Apple to sell 57 million iPhones in the first quarter of 2014, which would shatter the former record of 47.8 million. Instead, aided by sales in China, Apple sold 51 million iPhones, still a record, but six million short of expectations.

For the first time in company history, Apple launched its new iPhone in China the same time as it did for the U.S. and Western Europe. On a conference call with investors CEO Tim Cook said orders for the new iPhone 5S were more than expected, causing a period of slowed sales while the company filled those excess orders.

He also said a good amount of potential customers were tied up in cell phone contracts when the new smartphones released. He said when those upgrade cycles end, sales are expected to get a boost.

Cook said Tuesday, according to Forbes, that Apple will be exploring new areas for products in 2014. Not specifying what, he is almost sure to be talking about the iWatch, Apple's wearable device that is expected to act as a Bluetooth compliment to its existing product line.

"Innovation is deeply embedded in everybody here, and there's still so much of the world that is full of very complex products, etc.," Cook said. "We have zero issue coming up with things we want to do that we think we can disrupt in a major way. The challenge is always to focus to the very few that deserve all of our energy. And we've always done that, and we're continuing to do that... I think customers are going to love what we're going to do."

The Wall Street Journal noted that Apple's dilemma now is that it must compete with Google, Samsung and other companies offering low-cost devices. In other words, the playing field has expanded and competitors' products cost less to consumers.

"Protecting margins while kicking back cash is a way to grow old gracefully," Dan Gallagher wrote for the WSJ. "But for Apple's shares to regain some luster, the company needs to prove it can once again play the young turk."