HONG KONG –

Hon Hai Precision Industry Co.'s profit fell for a third straight quarter, reflecting the impact of a global slowdown in demand for smartphones.

Net income dropped 31 percent to New Taiwan dollars 17.7 billion ($565 million) in the three months ended June, according to an emailed statement. That compares with the NT$24.6 billion that analysts had expected on average and the NT$25.7 billion it earned a year earlier.

The world's biggest contract manufacturer of electronics is battling a widespread slowdown in smartphones and personal computers as Apple Inc., its largest customer, expects a third straight quarter of declining sales. While new iPhones are expected to be unveiled next month, researcher IDC said industry shipments would rise just 3.1 percent in 2016 — the first time in history that annual growth has fallen to single digit levels.

"We expect the iPhone production volume to decline by 9 percent year on year in 2016," Daiwa Capital Markets researchers led by Kylie Huang said last month. "Hon Hai is not immune to the downward trend as a major assembler for iPhones."

Affiliate FIH Mobile Ltd., which assembles devices for Xiaomi Corp. and Sony Corp., in May warned that income for the first half would plummet as much as 92 percent.

Revenue at Hon Hai fell 5.2 percent to NT$922 billion compared to analyst expectations of NT$937.8 billion.

Having recognized the trend, Hon Hai is investing to move up the food chain and find new sources of revenue. It's agreed to acquire a controlling stake in Japanese television maker Sharp Corp. and has partnered with Chinese internet giant Tencent Holdings Ltd. to make electric cars.

The company said Thursday that China has approved the Sharp deal.

Hon Hai doesn't provide revenue breakdowns, forecasts or hold investor conferences.