Wendy Zhang/ Shanghai Daily news

Compared with the good performance of their foreign counterparts in the second quarter of this year, domestic handset producers saw their market shares slump to 29.4 percent in China, Shanghai Securities Times reported today.
Competitive prices and diversified sales channels, dubbed the two strongest-points of domestic handset makers, are not as effective as before.
Nokia, the world's largest mobile phone maker, plans to develop low-end products to expand its market share. Three years ago, Nokia expanded its sale channels to enter the small and mid-sized cities in China, and Motorola followed suit last year. However, domestic handset makers were left stranded in the endless price war, an industry analyst explained.
Smuggled handsets, with prices that are 25-30 percent lower, have also dealt a heavy blow to domestic handset makers. To date, nearly 1,000 unlicensed handset makers have seen their market share jump to 30 percent, the analyst stressed.
Narrow profits have made some domestic handset producers give up research and development, and now leave it to handset-designing companies. It is hard for them to roll out products with their own features and thus make themselves less competitive, the analyst added.