Suning Appliance Co Ltd and China Mobile started to subsidize third-generation, or 3G, cell phones in Shanghai at the weekend to tap the booming market during the prime sales season.

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Customers who upgrade their second-generation cell phones to 3G or multimedia models get a 10 percent refund under a subsidy program which will cost the two companies 10 million yuan (US$1.5 million).

The subsidy, to run over two months, is expected to boost sales of 50,000 high-end handsets, according to the two companies.

November and December are traditionally regarded as the peak season for handset sales, accounting for nearly 30 percent of the full-year sales. Firms have stepped up their efforts to cash in, especially when the market is boosted by growing demand for 3G models. The 3G mobile phones have taken over 15 percent of the total market.

Cell phone sales on China's mainland this year will hit 7.5 million units, with more than 80 percent being upgrades, according to the two companies.

(Shanghai Daily November 16, 2009)