The market share of domestic Chinese mobile phones dropped from 48 percent at the beginning of this year to 44 percent in May, according to a survey by a Chinese research company.

Chinese mobile phones have losing market share since last year. According to statistics from CCID, their share fell from 52.9 percent in 2003 to 49.1 percent at the end of last year.

The situation is getting even worse in the first half of this year, said sources with the company.

The expansion of sales channels and the adjustment of the sales strategies of foreign mobile phone makers poses great threat to domestic companies, said Huang Jing, an expert with the China Center for Information Industry Development (CCID).

Due to relatively low quality and after-sale service, customers are less confident in domestic brands and tend to choose foreign brands when they buy a second handset, Huang said.

Increasing competition, the government has issued handset-making licenses to nine new Chinese companies in the past several months.

Home brands are expected to be more affected than foreign brands as they are already less competitive, said Huang.

Sources with other research companies have said that the market share of Chinese mobile phone manufacturers has actually dropped to 34 percent.

The different data come from different market segments under investigation, said Huang.

Some surveys concentrate on large shops in big cities, though home brands have a higher percentage of markets in small cities and rural areas, said Huang.

"Despite the difference, all the surveys show that domestic mobile phone producers are suffering a continuous market share drop," she said.

(XInhua News Agency July 19, 2005)