ZTE enters handset major league
It may not be long before another Western manufacturer is demoted in the top rankings, replaced by the Asian upstart
Published: 3 September, 2010
READ MORE: Metrics | ZTE | Handset
Phone makers aspire for a place in the handset hall of fame - the top five ranking - but for most it remains just that; an aspiration. However, ZTE's announcement that the company has shipped a record number of devices in the first half of the year consolidates it status in this elusive position.
In the first half of 2010, the Chinese infrastructure giant shipped a total of 28 million phones, 11 million into its domestic market and 17 million internationally, representing a 40% increase year-on-year. This is all the more impressive considering that in the first three months of the year Gartner estimated that ZTE shipped just 5 million devices, suggesting that ZTE more than quadrupled its sales in the second quarter.
The head of ZTE's mobile terminals business, He Shiyou, is confident that the manufacturer's phone revenue will grow by over 30% this year, and the ramp in ZTE's handset business is attributed to three factors: increasing demands from international markets; growing traction for 3G in China; and the increasing popularity of smartphones worldwide.
On the smartphone front, ZTE responded to the growing demand by launching 10 Android handset models in the first half of the year, many of these at the low-cost end of the spectrum. In July, the company released its 'Racer' smartphone onto the Three network, and represented ZTE's first Android device in the UK. An entry-level Android phone was also released on the Bouygues Telecom network in France.
Overall, ZTE recorded a year-on-year increase of 150% for shipments into European markets. In the UK, ZTE sales exceeded 1 million units, and the sales in France also exceeded 1 million in the first half of the year.
Despite its success in Europe, the US is the apple of ZTE's eye. According to He Shiyou, ZTE intends to make America the company's biggest mobile phone market in about five years, even though the country presently accounts for relatively few sales. ZTE has made inroads into the market, the most prominent being a custom-made phone developed for Verizon and launched in August. The 'Salute' is a low-cost slider phone sporting a 2.4-inch screen and a 1.3-megapixel camera.
Over in its domestic market, the continuing rollout of 3G networks in China and growing uptake amongst Chinese consumers is playing to ZTE's advantage, partly due to the weighting of its handset portfolio on the low-cost side but also because ZTE's device range includes support for the three different flavours of 3G used in China - UMTS, EVDO and the uniquely Chinese flavour, TD-SCDMA. In 2009 alone, ZTE shipped some 3 million TD-SCDMA phones and as China Mobile is aggressively expanding its network, ZTE's device sales for this technology are likely to jump substantially in 2010.
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