Apple selected Baidu as its main partner last year, but the company's progress in developing models fell short of its standards, the report said.

Shares of Chinese e-commerce giant Alibaba rose in premarket trade after reports it’s partnering with Apple to roll out artificial-intelligence features for phones sold in China.

Apple sales have been struggling in China—iPhone revenue slumped 25% there in the fourth quarter—as the trade wars between the two biggest economies heated up.