Amoi Electronic reports Q4 loss

Amoi Electronics<600057>, a Xiamen-based handset maker in China, announced loss in the fourth quarter of 2007. The company is expected to lose at least RMB 460 million for the year, source reported.

According to the company statement, Amoi Electronic lost RMB 460 million in the first nine months. The company is now expecting a further loss for the fourth quarter of 2007.

In order to gain larger market share, the handset maker launched new handsets with stock and GPS (global positioning system) functions.

Industry insiders attribute the loss to fierce competition in the Chinese market as the domestic market is currently dominated by international giants like Nokia and Sony Ericsson. New handset makers like Tianyu and ZTE<000063> <763> surge to make the competition even fiercer, and it is very difficult for first-generation homegrown handset makers to survive in the year of 2007.

Moreover, homegrown handset firms are expanding their businesses in rural areas and conducting a low-cost phone strategy, which squeezes the companies' profit margin, insiders noted.