The two companies are rapidly building national distribution networks and account for more than half of the fast-growing mainland market, with Nokia at about a third and Motorola at more than 20 percent, according to the latest industry data.

Nokia, China's largest handset seller, has built its mainland retail network to 48,000 stores from 40,000 a half-year ago, Colin Giles, senior vice president of customer and market operations for Greater China, said Monday.

Nokia works directly with 45,000 of the outlets, Giles said in Hong Kong, where the company was opening its first Asian flagship store, part of a plan to launch 18 such stores globally.

Giles said Nokia plans to open a flagship store in China within the next year in a direct challenge to Motorola, which opened a flagship store in Shanghai last week, its first in China. Both companies have made strong gains recently - a 10 percentage point gain in market share for Nokia last year alone - largely at the expense of homegrown Chinese rivals like Ningbo Bird and TCL Communication.

The domestic players made big inroads into their home market earlier in the decade but have given up most of those gains over the last two years amid aggressive campaigns by Nokia and Motorola.