Apple iPhone supplier Hon Hai Precision has reported disappointing earnings as growth in worldwide smartphone shipments plateaued. The world’s biggest contract manufacturer of electronics reported net income of NT$17.88 billion (A$746 million) in the three months ended June 30.

Research firm Counterpoint reported worldwide smartphone shipments grew just three percent in Q2 – but much of that growth came from Chinese vendors such as Oppo and Huawei. Those companies operate their own assembly plants instead of outsourcing to Hon Hai, which is a part of Foxconn.

Apple is expected to release its 10th anniversary iPhone within months, but observers predict possible delays in mass production of the more complex model could curtail Foxconn’s Q3 results.