The tech giant’s sales of apps and services helped profit grow 7 percent from a year ago, even as the company contended with slumping sales in China.

Apple on Thursday disclosed its iPhone sales dipped slightly during the holiday-season quarter, signaling a sluggish start to the trendsetting company’s effort to catch up to the rest of Big Tech in the race to bring artificial intelligence to the masses.

The company has heavily advertised AI features since the latest iPhones were released in September.

Sales of Apple iPhones dropped the end of last year, as the tech firm's roll out of new artificial intelligence (AI) features was met with a lukewarm response. Chief executive Tim Cook said the new features helped to drive stronger sales in the countries where they were available, such as the US.

Apple executives on Thursday forecast relatively strong sales growth, a sign the company will recover from a dip in iPhone sales as it rolls out artificial intelligence features. The forecast comes after Apple delivered a slight drop in iPhone revenues for the holiday shopping quarter and lagged Wall Street estimates,

Apple revealed quarterly results that slightly exceeded Wall Street expectations, but iPhone sales were flat on the previous year as the company battles rising competition from local device makers in China.

Apple reported fiscal first-quarter earnings Thursday. Analysts are focused on iPhone momentum following a sluggish start to the year for Apple's stock.