ZTE sets high aims for US push

Chinese firm's plans to double its market share on Apple's home turf fail to convince analysts

PUBLISHED : Friday, 11 January, 2013, 12:00am
UPDATED : Friday, 11 January, 2013, 3:56am

ZTE, which eclipsed Apple's handset shipments in China last year, plans to double its share in the iPhone-maker's home market by adding devices specifically tailored for individual US mobile operators.

The company intended to grab as much as 10 per cent of the US handset market by 2015, Cheng Lixin, head of ZTE's operations in the country, said on Wednesday at the annual International Consumer Electronics Show in Las Vegas. That would also boost the Shenzhen-based company's US sales ranking to fourth from fifth, he said.

ZTE planned to win backing from US carriers by drawing on its experience making communications equipment to design phones that use operators' networks more efficiently, Cheng said. That contrasted Apple's one-size-fits-all approach, which left AT&T struggling to cope with a flood of data following the launch of the iPhone, he said.

"Apple has a completely different business model than we do," he said. The Chinese phone-maker would also work with carriers to study consumer behaviour and needs to improve and customise designs, he said.

ZTE surpassed Apple's shipments in China in the second quarter of last year. In 2011, it more than quadrupled smartphone shipments in the country to 15 million. Apple's share of the smartphone market in China declined two spots to sixth in the third quarter, with less than 10 per cent, according to IDC. ZTE ranked fourth.

The company won sales in China by focusing on low-end smartphones, such as the Blade, which cost 1,000 yuan (HK$1,232) or less. The cheapest iPhone on Apple's China website, costs 3,088 yuan.

ZTE is developing more advanced and expensive models as it tries to lure consumers from Apple and Samsung Electronics in the US. At the Las Vegas show, it unveiled its new flagship handset, the Grand S, which is for fourth-generation Long-Term Evolution networks.

Still, the company is struggling to convince analysts it can break into the high-end segment.

"I find ZTE's ambitions in the high end and in the US fairly unrealistic," said Pierre Ferragu, a London-based analyst at Sanford C. Bernstein. "High-end smartphone users, especially in the US, are highly brand-conscious and I don't believe ZTE has made any progress on that front."