Paper: Nokia sees new rivals emerging in China

"Last year Motorola was aggressive, but not any more. This year we have come to see Chinese rivals using this chance," Nokia's China head, Colin Giles, told Finnish financial daily Taloussanomat.

"There have been very small local players appearing in the market."

Motorola, the world's second-biggest phone maker behind Nokia, has suffered the effects of sharply falling phone prices after it tried to hold on to its market share amid stiff competition in emerging markets and against Nokia, which leads in low-cost phones.

Nokia has felt the benefits of an early entry into emerging regions, including China, where it often has market shares of more than 50 percent, due to the efficiency of its distribution system.

Nokia's Giles said it was difficult to say if Nokia had benefited from Motorola's problems but it had a winning formula with a network of 40 regional distributors in China, enabling the supply of phones all over the country.

"Our biggest challenges (in China) are increasing competition and future 3G technologies," Giles told the paper.

He added Nokia had been involved with developing the Chinese standard 3G technology, TD-SCDMA, for several years. The company is set to begin manufacturing TD-SCDMA phones for the market and will announce more details by June next year.