China is likely to produce nearly 500 million mobile phones in 2007, or more than 40 percent of the world's total, sources with the economic restructuring and operation department of the Ministry of Information Industry predicted on Tuesday.

The forecast figure is 41 percent higher than the 2006 output.

Of the total production, around 400 million mobile phones will be exported, the sources added.

However, mobile phones made by Chinese producers saw their market share in China fall two percentage points from the end of 2006 to 33.8 percent in the first three quarters.

The 38 enterprises from the Chinese mainland sold 78.71 million GSM (global system of mobile communication) mobile phones in the nine months, up 10 percent on the same period of last year. The figure made up 22.6 percent of the country's total. The market share was equal to only 62.3 percent of that of the Finland-based Nokia on the mainland.

The sources said since a price war had broken out between domestic and foreign companies, the Chinese manufacturers began to lose their former advantages in price.

Meanwhile, the Chinese mobile phone makers failed to command core technology, which made it difficult for them to reduce production costs, the sources added.

(Xinhua News Agency December 5, 2007)