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By CNET Asia Staff, 2 September 2003 08:00

NEWS Chinese handset manufacturer Ningbo Bird has unseated Motorola to become the number one handset supplier in China, according to official news agency Xinhua. The company garnered a slim lead with 15 per cent of the market share in the first half of this year while Motorola followed in second place with 14.2 per cent, according to figures from the country's Ministry of Information for Industry. However, given the small lead, observers say that the situation could revert in the coming months as Motorola launches new models. Bird - as it is known outside China - attributed its success to a better understanding of local preferences, cheaper prices and a broader network of distribution channels, said the report. Bird was established in October 1992 and specialises in electronic communication products, such as mobile phones, handheld computers, mobile phone accessories and pagers. The middle and low-end segments of the market are the firm's primary targets. Like Bird, Chinese companies have made deep inroads into the market. In the first half of the year, domestic brands gained 55.3 per cent of the local market, growing by 16.2 per cent from last year, according to financial news website FinanceAsia. According to a study by Portelligent, a US-based market research firm specialising in consumer electronics, Chinese handset makers have what it takes to compete both in domestic and export markets around the world. This conclusion stemmed from an in-depth analysis of 17 handsets from 11 Chinese firms including Amoisonic, Ningbo Bird, Capitel, Eastcom, Haier, Kejian, Konka and Legend. The firm said 2G and 2.5G phones from the mainland performed well on most counts and are comparable to those produced by major multinationals. In particular, a pen-like GSM phone - Haier's P5 - which features a built-in laser pointer and voice recorder, stood out as a novel design concept, it added. Portelligent's study also found that Chinese mobile phone makers tend to 'mix and match' components rather than using a complete chipset and design from a single supplier. Recently, Bird announced its venture into India with the launch of its products in the country. Mobile operators there believe Bird's wide range of low-cost handsets will do as well in India as they have in China. Mobile phone penetration in India remains low, leaving much room for growth. According to Cellular Operators Association of India, subscriber numbers rose to 16.3 million in July. Sari Baldaus, president of Nokia Networks said in an report from news agency AFX that she expects to see 100 million mobile phone users in the country in three to four years.