Amoi Electronics expected its loss for the year will exceed 460 million yuan (US$62.16 million), which the company lost in the first nine months, Shanghai-listed Amoi said in a recent statement.

Xiamen-based Amoi previously expected to have a profitable fourth quarter due to the launch of new handsets with stock and GPS (global positioning system) functions. Now the company expected to lose money in the past quarter, Amoi said in a statement to the Shanghai Stock Exchange.

Amoi's former president Li Xiaozhong resigned two weeks ago and the company appointed Lu Zhenyu in his place.

Lu attributed the loss in the fourth quarter to fierce competition in the domestic market, where Nokia and Sony Ericsson dominate.

"It was a tough year for the first-generation homegrown handset makers, like Ningbo Bird and Amoi, squeezed by both overseas and home-grown rivals," said Sandy Shen, a Gartner telecommunications analyst based in Shanghai.

"Foreign firms including Nokia still had the highest market share and new Chinese stars surged such as Tianyu and ZTE," Shen added.

In the domestic market, the era in which a successful model can make a firm survive has passed, industry insiders said.

The low-cost phone strategy and expansion in rural areas also eroded homegrown firms' profit margin, according to Li Xuefang, an analyst at CCID Consulting, a Beijing-based research firm.

China's average phone price was 1,142 yuan in 2007 compared with 1,408 yuan in the previous year.

(Shanghai Daily January 3, 2008)