China Unicom (Hong Kong) Ltd, the nation's second-largest mobile-phone company, posted a second-quarter profit that surpassed analysts' estimates as smartphone users who download music and videos boosted sales.

Net income fell 2 percent to 2.42 billion yuan ($381 million), from a restated 2.47 billion yuan a year earlier, based on figures derived from half-year earnings the company reported on Thursday. That compares with the 2.1 billion-yuan median of five analysts' estimates in a Bloomberg News survey.

Chairman Chang Xiaobing has turned to cheaper smartphones from Chinese suppliers Lenovo Group Ltd, ZTE Corp and Huawei Technologies Co Ltd to trim subsidy costs and reduced reliance on Apple Inc's iPhone to lure new users. Unicom lost exclusive rights to offer the iPhone with a service plan in the nation when China Telecom Corp began selling the device on March 9.

"We believe the mass market and subsidy strategies of China Unicom in the 3G market have effectively enabled China Unicom to gain market share," Andy Poon, a Hong Kong-based analyst with Kim Eng Securities Ltd, wrote in a report on Tuesday.

China Daily - Agencies