Apple said iPhone revenues slipped 1% from last year to $39.3 billion, topping Street forecasts, while China sales were essentially flat at $14.73 billion. Revenues from Apple's key services business, which includes Apple Pay, iCloud and Apple TV, rose 1% to $24.21 billion, narrowly ahead of the $23.97 billion forecast.

While iPhone sales dropped 1 percent, consumer interest in Apple’s flagship product is expected to pick up later this year.