Sales of smartphones to drive ZTE profits

PUBLISHED : Friday, 22 June, 2012, 12:00am
UPDATED : Friday, 22 June, 2012, 12:00am


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ZTE, the world's fifth-largest supplier of telecommunications equipment, says it aims to ratchet up its sales of smartphones to boost profitability.

Earlier this week, the Shenzhen-based company rolled out its first single-chip LTE smartphone, the Grand X LTE (T82).

The handset is based on the Android 4.0 system and has Wi-fi capability. It is equipped with a 1.5 GHz dual-core CPU and an 8 mega-pixel main camera.

The gadget will be available in the Asia-Pacific region and Europe in the third quarter this year.

'Products in the Grand series are our high-end flagship offerings this year,' said He Shiyou, the company's executive vice-president and head of the terminal handset division.

'ZTE aims to enhance its profile in the high-end market with the Grand series of smart terminals.'

The company said in April that its plan for this year was to increase smartphone shipments globally to between 40 and 50 million units from 15 million last year.

At the time, He said ZTE's smartphone sales should reach 100 million units in three years.

Lv Qianhao, general manager of ZTE's handset marketing strategy department, said that while the company was aiming high, 35 million was the target for this year.

'We attach more importance to how much of the shipment involves high-end products, and how many are sold in the more developed markets such as Europe and the United States,' Lv said.

ZTE said it was committed to driving innovation to increase its market share worldwide, including in China.

Gao Feng, head of the company's handset industrial design centre, said: 'Everyone knows it is a difficult road for a brand formerly positioned as low end to move upward, but we will be committed to it.'

Gao said every market had its own special preferences and ZTE tailored products to meet local needs.

For example, American consumers might prefer darker colours than Europeans, while 'the Japanese might prefer more pinky things', he said.

Research firm IDC describes 2012 as the 'year of mobile ascendency' in virtually all dimensions - devices, applications and networks.

It estimates shipments of mobile devices will total 895 million this year, compared with fewer than 400 million personal computers.

ZTE is one of the companies fuelling the trend. Sales of its smartphones have surged over the past couple of years.

In 2010 the company, which is listed in Hong Kong and Shenzhen, shipped just three million smartphones. But last year, that figure jumped to 15 million.

However, the aggressive growth in sales pinched profit margin. ZTE's gross profit margin was 15.18 per cent last year, down 3.81 percentage points from 2010.

Lv said the company wanted to be the third-biggest smart terminal supplier worldwide by 2015.

He said ZTE would polish its brand and increase awareness of its name through better service.

'Brand image is a comprehensive issue and there are a lot we can do,' Lv said.

He said that last year, only 10 per cent of the company's products did not carry the logo of ZTE.


ZTE's world ranking in cellphone market share last year, Gartner says. One of its products is the V882 waterproof phone (above)