Ningbo Bird (stock code: 600130), the mainland's second-biggest maker of mobile telephones, posted a first-half loss as Nokia and Motorola won sales at the expense of domestic manufacturers in the world's biggest handset market.

The company turned to a net loss of 237.2 million yuan from a 31.2 million yuan profit a year earlier, Ningbo Bird said. Sales fell 39 per cent to 2.13 billion yuan.

Ningbo Bird and larger local rival Lenovo Group have relied on cheaper handsets to lure users on the mainland. Nokia and Motorola also unveiled cheap models in promotions to win customers.

"Nokia and Motorola have created great brands that are helping them take market share from local companies," said Zhang Yanling, an electronics analyst at researcher Analysys International. "A lot of Chinese consumers, if they have to choose between a Lenovo handset or a Nokia handset that are the same price, they will choose Nokia every time."

A decline in the gross margin combined with lower sales led to the loss, Ningbo Bird said in a preliminary earnings statement to the Shanghai Stock Exchange on Friday, without giving more details.

Lenovo said earlier this month that handset sales in the quarter to June fell by more than 33 per cent to US$113 million because of keen competition.

Amoi Electronics, the mainland's No3 domestic handset producer, said last month that lower profitability and falling sales would cause a first-half loss, compared with a year-earlier profit of 9.15 million yuan.

Some mainland companies have benefited by working with overseas producers. Eastern Communications, which manufactures mobile telephones with Motorola, forecast in June that first-half profit would surge.

Nokia had a 31.7 per cent share of the mainland handset market in the first quarter, followed by Motorola's 21.1 per cent share, according to Analysys. Samsung Electronics had a 9 per cent share and Lenovo was fourth with 6.5 per cent, the researcher said.