Sky-mobi Ltd, China's biggest mobile application developer, slashed its revenue growth target for the first quarter, citing slower cellphone sales and growing competition among Chinese carriers, Reuters reported Friday.

Sky-mobi, which mainly makes applications for low-end feature phones, said it expects 164-167 million yuan ($25.6-$26.1 million) in revenue for the first quarter, down from 180-190 million yuan it had projected earlier.

"We expect revenues for the quarter to be approximately 10 percent below our original expectations due to our lower-than-expected overall handset sales in China and a more difficult operating environment for mobile service providers," Chief Executive Michael Tao Song said in a statement.

China, which has about 700-800 million mobile phone subscribers, is dominated by three providers -- China Mobile Ltd, China Unicom and China Telecom Corp Ltd -- who have seen their margins hit by higher handset subsidies.

Sky-mobi's Maopao mobile application store is pre-installed on more and more handsets sold in China, and in March it signed an advertising deal with Internet portal Sohu.com Inc.

Earlier this year, the company warned that Chinese operators' decision to switch to a different mobile payments mechanism would hurt growth.

Sky-mobi, also known for its location-based social network 'Maopao Community', expects fiscal 2012 revenue of 680-690 million. It had posted 675.3 million yuan in revenue in fiscal year 2011.

Shares of the company, which went public last year, were down 5 percent in trading before the bell. They had closed at $5.30 on Thursday on Nasdaq -- 34 percent below the offering price of $8.