ZTE eyes new 'wearable' products amid increased push into 4G market

ZTE staged a comeback by returning to profitability last year, as it plans to explore fresh opportunities in "wearable computing" devices, while pushing further into the fast-growing 4G network equipment and smartphone markets.

Shenzhen-based ZTE, the world's fifth-largest telecommunications equipment supplier, rebounded from its first annual net loss in 2012 with "a large-scale improvement in profitability in its major operations" as the company refocused its strategy and cut expenses.

ZTE swung back to a net profit last year with a 147.79 per cent turnaround to 1.36 billion yuan (HK$1.71 billion), up from a loss of 2.84 billion yuan in 2012. The firm's net profit was well in line with its earlier estimate of between 1.2 billion yuan and 1.5 billion yuan.

In a filing with the Hong Kong stock exchange yesterday, ZTE chairman Hou Weigui said: "Wearable device will present a new direction of development."

ZTE introduced earlier this year at the Consumer Electronics Show in Las Vegas its first product in the so-called wearable device category, the "BlueWatch". This smart watch serves as a remote camera controller, a pedometer and caller ID display, and can be used to access social media.

ZTE returned to profit through stringent cost controls over the execution of low-margin contracts in international projects and solid revenue from mainland projects. It also cut selling and distribution, administrative, and research and development expenses last year. Total revenue, however, fell 10.56 per cent to 75.23 billion yuan, from 84.12 billion yuan in 2012, mainly due to lower revenue from basic mobile phones, data cards and 3G smartphones.