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South Korea's two major handset makers including Samsung Electronics Co. saw their shares in the global mobile phone market drop last year in the face of stiff competition from rival companies, a report showed Monday.

According to the report by market researcher Strategy Analytics, Samsung Electronics, the world's third-largest handset maker, sold 118 million mobile phones last year, making up 11.6 percent of the global market, down from 12.6 percent a year earlier.

LG Electronics Inc., the fifth largest, sold 64.4 million units during the same period with its market share slipping to 6.3

percent from the previous year's 6.7 percent, the report showed.

The two South Korean firms lost ground to other competitors such as Nokia and Motorola, the No. 1 and No. 2 players. Nokia's market share inched up to 32.4 percent from 32.2 percent a year earlier, while Motorola saw its share rise to 7.4 percent from 5.6 percent.

The market share decreases of the South Korean companies came amid concerns they are failing to unveil diverse handsets appealing to customers' needs, even in low-end brackets.

The report also said Samsung Electronics and LG Electronics did not fare well in terms of the operating profit ratios last year for their handset businesses.

Samsung's operating profit ratio stood at 9.7 percent last year compared to the previous year's 12.1 percent, while the corresponding figure for LG fell to 1.3 percent from 4.5 percent over the same period.

Nokia saw its operating margin ratio improve to 15.6 percent from 15.1 percent. The figure for Motorola, however, edged down to 9.5 percent from 10.3 percent a year ago, the report showed.

Seoul, March 5 (Yonhap News)