Nokia, Motorola and Samsung were the top three brands in the domestic market, said Analysys International, a Beijing-based IT consulting firm.

The market share of local brands fell to 29.2 percent by September, from 38 percent in December last year and 55 percent in 2003, said Beijing-based CCID Consulting, a research firm under the Ministry of Information Industry.

Nokia and Motorola held more than 55.6 percent of the market. In the third quarter, Nokia's market share was 33 percent, followed by Motorola's 22 percent and Samsung's 8 percent, according to Sandy Shen, a Gartner's analyst.

Top Chinese handset makers are Ningbo Bird and Lenovo, each with 5 percent of the market, said Shen.

Nokia's senior Vice President Colin Giles said: "Chinese competitors overinvested in promotion and invest inefficiently in research, and that influenced their performance."

Foreign firms have invested heavily in phone design and multimedia functions, such as MP3 players, which attract people to replace phones, said Analysys.

Motorola's super-thin model Razor V3 and PDA phone Ming pioneered design and received warm market response in China.

Meanwhile, Sony Ericsson, the number four seller in China, launched MP3-enhanced phones and Nokia also introduced multimedia phones with functions such as a five-megapixel camera.

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