The figure, 109 million, is 28 percent higher than that of 2005 and makes up one tenth of the world's total handset sales.

The Norson report shows new mobile subscribers last year were mainly middle and low-end users, which has boosted the sales of cheap cell phones.

According to the report, the percentage of handsets below 1,000 yuan (128.2 US dollars) increased from 29 percent in the first quarter of 2005 to 52 percent in the fourth quarter of 2006.

The combined market share of Nokia and Motorola in China exceeded 50 percent in the second quarter of 2006 and kept rising in the third and fourth quarters.

Three or five major manufacturers will take up 80 percent of the Chinese mobile phone market this year, the report predicts.

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