China's mobile phone markers continue to lose market share, but their profits are on the rise, officials reported yesterday during an information technology forum in Shanghai.

China-brand handset makers held a 31.3 percent share of the world's biggest phone market in the third quarter last year, the latest figure available, according to Beijing-based CCID Consulting Co, a research firm under the Ministry of Information Industry. That compares with 36.7 percent a year ago and a peak of 52.9 percent three years ago.

Related readings:  Firm set to enter int'l mobile phone market  Most Chinese mobile users sure to buy 3G handsets  China Jan-Nov telecom industry revenue up 11.5%

"It was the 11th quarter that Chinese brands lost market, but the profit margin has improved," Jiang Lifeng, a CCID's senior analyst, said during Consumer Electronics Market China 2007.

Profits figures were not available.

Chinese phone makers said they have strengthened research to improve product quality.

"We have invested heavily to develop products that are different from our rivals, and they received a warm market response," said Li Jian, vice president of Hi-Tech Wealth.

The Beijing-based company has invested 300 million yuan (US$38.46 million) to develop special smart phones that help protect users' privacy. Measures include making short messages impossible to read by unauthorized persons.

Lenovo and Dopod have also developed high-end phones catering to Chinese consumers.

Meanwhile, the top four vendors, Nokia, Motorola, Samsung and Sony Ericsson, have expanded in the country. Their combined market shares jumped to 62 percent in the third quarter from 48.5 percent a year ago.

(For more biz stories, please visit Industry Updates)