Apple Inc. reported a bigger-than-expected rise in iPhone sales for the holiday quarter but forecast current-quarter revenue below estimates as customers hold back on phone upgrades in anticipation of the launch of the 10th-anniversary iPhone.

Apple sold 78.29 million iPhones in the first quarter ended Dec. 31, up from 74.78 million last year, marking the first quarterly growth in iPhone sales in a year.

Analysts on average had estimated iPhone sales of 77.42 million, according to research firm FactSet StreetAccount.

The results, which reflected the first full quarter of iPhone 7 sales, come at a time when global demand for smartphones is slowing and cheaper Android alternatives are flooding the market.

Apple's services business, which includes the App Store, Apple Pay and iCloud, recorded an 18.4 percent growth in revenue, helped by the popularity of games such as Pokemon Go and Super Mario Run and higher revenue from subscriptions.

The company forecast total revenue of between $51.5 billion and $53.5 billion for the current quarter. Analysts, on average, had expected revenue of $53.79 billion, according to Thomson Reuters I/B/E/S.

The company's net income fell to $17.89 billion, or $3.36 per share, in the quarter from $18.36 billion, or $3.28 per share a year earlier. Analysts on average had expected $3.21 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 3.3 percent to $78.35 billion in the quarter, compared with the average estimate of $77.25 billion.