In China, Nokia was the seventh-biggest mobile phone vendor in the second quarter, but the company was not even among the top 10 smartphone makers in the country during the period, according to a report released by Beijing-based research firm Analysys International.

Samsung, Lenovo and Shenzhen-based Yulong Computer Telecommunication Technology Co, which produces Coolpad handsets, were the top three smartphone vendors in the second quarter, with 18.6 percent, 12.4 percent and 11.2 percent shares, respectively, the report said. In the second quarter, more than 77 million smartphones were sold in China.

Some newcomers, such as Beijing-based smartphone company Xiaomi Corp, presented sparkling sales figures and are ambitious. Xiaomi sold 7.03 million mobile phones in the first half of this year, realizing a revenue of 13.3 billion yuan ($2.16 billion). The company has an estimated market value of $10 billion, even bigger than the purchase price of Nokia's mobile phone business.

"Nokia faces fierce competition in China. But I think the acquisition by Microsoft will help it to solidify its position as the world's No 1 brand in Windows Phone devices," Xiang Ligang, a telecom industry expert, said. He argued that Nokia might have reached the bottom and now it can start to recover.

However, the acquisition has brought in a hidden threat for many mobile phone companies.

"Microsoft's move will increase the worries of other mobile phone vendors, who also produce Windows Phone handsets," said James Yan, an analyst with International Data Corp China, hinting Microsoft may hand out more resources to Nokia, rather than other companies.

"That is likely to push some companies to look to self-developed mobile operating systems, or they may turn to other existing mobile platforms," Yan added.

Dai Shu, a spokesman for Shenzhen-based ZTE Corp, the world's fifth-biggest mobile phone vendor by shipments, said on Tuesday that ZTE will continue to develop more Windows Phones based on two key factors.

"First, we have to make sure that the Windows Phone is an open ecosystem; second, we will develop Windows Phone devices only as long as our consumers need them," Dai said.