ZTE eyes high-end smartphone market in the U.S., WSJ says
The Chinese telecommunications manufacturer is a rising power in the handset business, but is barely a blip in the U.S. The company wants that to change.
- SABEW Best in Business 2011 Award for Breaking News Coverage, Eddie Award in 2020 for 5G coverage, runner-up National Arts & Entertainment Journalism Award for culture analysis.
A year from now, you may be coveting a flashy new ZTE smartphone.
At least, that's what ZTE is hoping for. In an interview with The Wall Street Journal (subscription required), Lixin Cheng, the head of ZTE's North American business, said he plans on introducing high-end smartphones in the U.S. By 2015, he expects the U.S. to be the largest market for ZTE.
ZTE, which makes mobile devices and telecommunications equipment, is a growing power in the mobile-handset business. Globally, the company is the fifth-largest handset maker by market share--just behind Apple, according to Gartner. But in the U.S., ZTE barely registers, with virtually zero consumer awareness.
That's because the company has long made phones with other brands slapped on them, a model known as white labeling. The company has largely made unbranded phones for the prepaid carriers, although ZTE's name is increasingly showing up on the packaging.
But ZTE wants to follow in HTC's footsteps and build its own brand and move up a few tiers in the smartphone market. HTC had previously been a white-label smartphone maker before setting out to establish more visibility with consumers around the world.
ZTE is in talks with the top four national carriers in the U.S. about building phones, likely based on Google's Android or Microsoft's Windows Phone platform, Cheng said. The company is hoping to use LTE technology--and a more affordable price tag--to win over carriers and consumers.
But it's unclear how easily ZTE will be able to breach the U.S. market. The company is competing with a number of established players, including Samsung Electronics and Motorola Mobility, as well as others also trying to break into the market, including fellow Chinese vendor Huawei and Nokia.
Even HTC, often held up as the model for how to establish a new brand, has struggled in the past month, and is poised for further weakness down the line.
The carriers may also continue to view ZTE as a partner for affordable smartphones, and may not be interested in throwing their support and resources behind an untested brand.
Still, already a strong player in China, ZTE sees U.S. as a growth market. The company is considering building a manufacturing facility to make mobile devices in the U.S., Cheng told the WSJ. ZTE currently employs 400 workers in North America.