ZTE eyes high-end market for future growth

[Jeff Causey]

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ZTE, the world’s ninth-largest smartphone manufacturer, is looking to move into the high-end market in 2015 to help improve financial performance and improve their presence in markets like the U.S. ZTE, like other Chinese manufacturers, have tended to operate in the lower end of the market relying on sales quantity in markets like China to offset the razor-thin margins they achieve with their devices. Zeng Xuezong, ZTE’s executive vice-president, says “we will make more and more premium smartphones” joining Huawei and Lenovo as companies hoping to break out in coming years.

Zeng thinks ZTE is in a good position to make a move now. Perhaps the biggest impetus is the introduction of 4G networks to the world’s largest markets, which will stimulate demand for higher performing smartphones. Unlike a company like Samsung or Apple, ZTE thinks they can produce a premium handset competitive with phones like the Galaxy S 5 or the iPhone 5S, yet priced well below those handsets. That has been the case with devices like the ZTE Nubia Z5

To overcome a reputation of building cheap, inferior phones and a black mark regarding security created by the U.S. government, ZTE plans to double its global marketing budget with some markets, like the U.S., seeing an even larger increase. According to Zeng, “there is indeed a gap between the brand awareness of Chinese companies and those top global brands, and this is what our team is trying to build for consumers.”

ZTE is aiming to increase its U.S. market share to 10 percent by 2017 compared to the 6 percent share it sits on right now. Meanwhile, the business unit producing smartphones and tablets accounted for 28 percent of overall revenue last year. ZTE thinks that unit will continue to grow and is estimating 20% growth just in 2014.

Do you think a company like ZTE will be able to expand their market share in the U.S.?

source: Reuters


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