China's smartphone industry is at risk of becoming entangled in intellectual property disputes as many of the important patents are held by international companies. The China Academy of Telecommunication Research, a branch under the Ministry of Industry and Information Technology, issued a white paper on mobile terminals that said the country shipped over 110 million smartphones last year. China is the largest production base for mobile devices and in 2011, the country produced 1.13 billion mobile devices, including phones and tablet computers. Domestic brands, such as ZTE, Huawei Technologies, and Lenovo made significant progress in producing mobile phones, especially in the mid-to low-end segment. Domestic mobile handset makers have gradually squeezed their overseas counterparts' market share. Last year, China shipped 455 million mobile handsets, with domestic brands accounting for 72 percent, The China Daily writes citing the report. However, experts have warned Chinese companies that they may be hit with lawsuits over intellectual property rights. "As more Chinese mobile phones pour into the global market, it is much more likely that international rivals will use intellectual property rights as a weapon in competition," Xu Zhiyuan, senior engineer at the China Academy of Telecommunication Research, said.
