ZTE is already the fourth largest smartphone vendor in the US, with a nearly 8 per cent market share. Photo: Thomas Yau
Mr. Shangkong
by George Chen
Mr. Shangkong
by George Chen

ZTE who? China's next push is smartphone brand names in US

Promotion for the Chinese Axon phone brand during recent US state visit signals B2C push

Try and guess which company is the No4 smartphone in the US market after Apple, Samsung and LG? It's a Chinese company.

Many American smartphone users may not know ZTE, one of the two largest telecoms equipment makers in China, but ZTE is already the fourth largest smartphone vendor in the US, with a nearly 8 per cent market share, according to consultancy firm Strategy Analytics.

The bigger story behind ZTE's No4 position in the US market is about the long-term strategy that many Chinese technology firms are now going to take more seriously following President Xi Jinping's recent state visit to America.

The reason why American smartphone users never hear about Chinese brands like ZTE, or Huawei - its biggest rival on the mainland - is because many Chinese manufacturers provide their products to major mobile network operators including AT&T and Verizon without promoting their own brands.

But the situation is changing.

After years of partnerships with US mobile network operators, both ZTE and Huawei are more keen to put themselves directly in front of consumers in North American markets. In other words, their business strategy is shifting from the B2B (business to business) to a B2C (business to consumer) model.

The latest effort by ZTE to raise its brand awareness in the US was to put its latest ZTE smartphone, under a subsidiary brand called Axon, on the tables of a welcome banquet for the Chinese delegation at the Westin hotel in Seattle, with many VIPs accompanying Xi proudly showing off their Axon smartphones.

Such a high-profile promotion, which must have received the blessing from China's foreign ministry that was in charge of protocol for Xi's visit, immediately went viral on global social media, attracting a lot of attention from the US media and public.

That was exactly the goal of ZTE - to raise its brand awareness in the tough US market to compete with the top three smartphone leaders Apple, Samsung and LG.

It will be interesting to see how South Korean and Chinese smartphone makers launch a new round of competition to win American consumers. The Chinese are making their shift to B2C as top leaders like Xi are keen to see Chinese brands shine on the world stage - part of Beijing's long-term ambition to move from "made in China" to "innovated in China".

The road ahead won't be smooth as cybersecurity and intellectual right issues will challenge Chinese technology firms in the US from time to time. But that's another story.

If ZTE or Huawei can truly win the hearts and minds of American smartphone users, I say that's a good start to be a truly international market player despite possible political trouble facing the world's two largest economies.


This article appeared in the South China Morning Post print edition as: ZTE who? China's next push is brands