Ningbo Bird Co, once the No. 1 Chinese-brand handset maker, continues to suffer on the profit front as the result of stronger competition.

The company reported yesterday that it lost 22.08 million yuan (US$3.2 million) in the first half in a market that Nokia, Samsung and other Chinese manufacturers now dominate.

The Shanghai-listed phone maker has begun shutting down subsidiaries to cut costs and improve profitability, but it is still expected to lose money in the third quarter, Bird said in a statement to the Shanghai Stock Exchange.

Despite the bad news, the loss narrowed in the period, after a sale of the company's stake in a joint venture. The company lost 592 million yuan in the same period last year.

From January to June, the Ningbo City, Zhejiang Province-based manufacturer generated 1.29 billion yuan in revenue, 39 percent less than a year ago. Domestic handset revenue amounted to 600 million yuan, 33 percent lower. Bird's overseas phone sales were 660 million yuan, a 44-percent decrease.

"We have strengthened research and shortened our inventory cycle in an attempt to reduce the loss. Market conditions are tough," Ningbo Bird officials said yesterday.

The company announced it will sell its 50 percent stake in a joint venture with French-based Sagem Mobiles for 158.98 million yuan.

Bird was the country's top homegrown handset brand in 2005 but lost the title in 2006, according to Gartner Inc, a US-based information technology research firm.

"The old names like Bird and TCL have lost their leading positions, and new players Tianyu and Lenovo are tops among domestic brands," said Sandy Shen, a Gartner analyst based in Shanghai.

Foreign firms such as Nokia, Samsung and Motorola also increased market share in China, the world's biggest handset market.

There was some good news on the day. Bird's shares rose 1.9 percent to 2.68 yuan, compared with 0.34 percent growth for the Shanghai stock market's key index.

(Shanghai Daily August 26, 2008)