Lenovo plans to increase its marketing budget this year with a focus on consumer devices such as its K900 smartphone and Yoga touch-screen laptop, Yang said. The Horizon Table PC, another product unveiled at CES, features a 27-inch (69 centimeter) touch-screen panel that enables multiple users to play games.

“We don't have a strong brand,” Yang said. “Particularly w i th smartphones, you need to expand into the telecom channels, you need to spend money.”

Lenovo's handsets will break even “soon” as they are introduced in markets outside of China, including Russia and Vietnam, he said.

For ZTE and Huawei, the world's No. 4 and No. 6 mobile handset vendors, moving from low-end feature phones to high-end smartphones depends on convincing consumers and wireless carriers that their devices are just as good, reliable and functional as their more famous competitors.

“ZTE is one of the best in terms of quality,” Cheng Lixin, chief executive officer of ZTE's U.S. unit, said at CES. He estimates ZTE is ranked fifth with 5 percent of the U.S. market. “Our return rate at AT&T is below 1 percent.”

Eoin Treacy's view The handset market remains highly competitive with rich rewards for companies that successfully appeal to an increasingly demanding consumer base. There is definitely room for expansion at the lower end of the scale, considering the premium price of many smartphone models. If Chinese companies are to capture additional market share they are likely to attempt to appeal to this sector. In this regard, the smartphone market is unlikely to differ from the rest of the consumer electronics or automobile sectors. Over the last few months there has been considerable movement within the handset market and I thought it might be an opportune time to review the sector. (Also see Comment of the Day on December 20th 2011).

Apple remains in a corrective phase having hit a medium-term peak near $700 in September. It dropped below the psychological $500 level on Tuesday and pushed back above it yesterday. The share will need to sustain a move above $560 to begin to suggest a return to demand dominance beyond the short term.

Google continues to consolidate above its more than two-year range and has held a progression of higher reaction lows since November. It paused below $750 last week but a sustained move below $700 would be required to question medium-term scope for continued higher to lateral ranging.

Following an impressive advance Samsung Electronics encountered resistance in the region of KRW1.6million two weeks ago and appears to have entered a process of mean reversion. However, a sustained move below the 200-day MA, currently near KRW 1.31million would be required to question the consistency of the medium-term uptrend.

Following a collapse from TWD1200 to 200 HTC appears to have begun a process of base formation development. It will need to sustain a move above the 200-day MA, currently near TWD340, to suggest a return to demand dominance beyond the short term.

ZTE appears to have bottomed following a steep decline in 2011 and half of 2012. It broke successfully out of its six-month range three weeks ago and while somewhat overbought in the short term; a sustained move below HK$12.50 would be required to question medium-term recovery potential.

Both Nokia and Research In Motion share similar patterns. They both hit medium-term nadirs in the latter half of 2012 and have held progressions of higher reaction lows since. Sustained moves below their respective 200-day MAs would be required to question medium-term scope for additional upside. Ericsson has rallied to challenge the more than yearlong progression of lower rally highs but will need to hold above the 200-day MA if the benefit of the doubt is to be given to the upside. LG Electronics remains within its 18-month base.

Lenovo remains in a relatively consistent medium-term uptrend. While there is potential for some consolidation as it tests the April peak, a sustained move below the 200-day MA, currently near HK$6.70, would be required to question medium-term upside potential.

Sony has rallied to break its progression of lower rally highs and has closed its overextension relative to the 200-day MA. It will need to sustain a move above ¥1000 to confirm a return to medium-term demand dominance.

The variability in the fortunes of handset manufacturers confirms the competitive nature of the sector and the capability of a new innovation to capture market share in a short period of time. At present the outperformance of some of the less celebrated manufacturers is particularly noteworthy. (Also see Comment of the Day on January 14th) .