The Next Big Thing

ZTE shipped 26m smartphones in H1, to launch 'secret product' developed by ex-Blackberry team

PUBLISHED : Monday, 13 July, 2015, 12:51pm
UPDATED : Monday, 13 July, 2015, 12:51pm

Chinese technology giant ZTE is set to launch a "secret product" that it hopes will change the landscape of the global smartphone business following the hiring of a team of former Blackberry staffers last year.

Speaking on the sidelines of ZTE's global analyst conference in Shanghai on Monday, Adam Zeng Xuezhong, chief executive of the company's mobile devices unit, said that ZTE would launch a new flagship smartphone "very soon".

Adopting late Apple CEO Steve Jobs' favourite line during a presentation to hundreds of global industry analysts, Zeng told the crowd: “One more thing, do you remember what we did last year? We hired a top Blackberry design team to join us in North America.”

“After they joined us, we also set up our [research and development] centre in North America and we will soon launch a product which I can call ‘A Product’ today but you will see it coming out soon,” he said.

ZTE hired dozens of former BlackBerry designers and engineers in early 2014 in the United States and Canada, according to people familiar with the situation. Those former BlackBerry employees quickly set up a new team at ZTE, which was reorganised and launched as ZTE’s first North America-based R&D centre late last year.

Since then the team has been working intensively on a new mobile device, which ZTE considers a top secret and few even inside the company know about. ZTE seems to be following notoriously tight-lipped Apple's strategy on R&D, where investors and customers are kept guessing until a new device is announced, building hype and anticipation ahead of launch.

To speed up its expansion into the global smartphone market, ZTE span off its Nubia mobile device brand into an independent subsidiary. In May, the company announced the "bezel-less" Nubia Z9 high-end smartphone.

Nubia fans include China's "first lady" Peng Liyuan, wife of president Xi Jinping. After she attracted some criticism on the Chinese web for being seen using an iPhone, Peng has become something of a brand ambassador for ZTE and Nubia after she was snapped using a Nubia Z5 during an official trip to Germany.

At the ZTE conference on Monday, Zeng declared his ambition for the company to become one of China's top smartphone makers by 2020, putting it in direct competition with foreign brands Apple and Samsung, as well as domestic rivals Xiaomi and Lenovo.

At present, ZTE lags behind its rivals, not making it into the top 5 largest smartphone brands in China, according to research firm IDC. Zeng said that in the first half of 2015, ZTE shipped 26 million smartphone worldwide. By comparison, rival Xiaomi saw 34.7 million shipments, and smaller upstart Meizu saw 8.9 million units shipped, according to China Internet Watch. While neither Apple or Samsung have yet released figures for the second quarter, analyst firm TrendForce forecast worldwide shipments of 45 million and 80 million smartphones respectively.

Xiaomi's figure was seen as something of a blow to the company's stated ambition of shipping 100 million units worldwide this year. Chief executive Lei Jun said the company missed forecasts due to the "slowing down" of the Chinese smartphone market.

"2014 was a very interesting year. We have seen many of our peers rising very fast but we’ve also seen many of them falling very fast our industry,” said Zeng.

“Can Chinese companies really have our own innovation and breakthrough technology? I think you have to be innovative if you want to secure a position on the world stage and compete with global players.”

Additional reporting by James Griffiths