How ZTE plans to woo US consumers: Go big, go cheap

With supersized smartphones all the rage -- thanks to Samsung's Galaxy Note line and the newly unveiled iPhone 6 Plus -- ZTE offers its 5.7-inch ZMax.

Roger Cheng Former Executive Editor / Head of News
Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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Roger Cheng
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ZTE's ZMax is a jumbo-size smartphone at an affordable price. Lynn La/CNET

NEW YORK -- ZTE may be one step closer to its breakout moment in the US.

The Chinese smartphone and telecommunications-equipment manufacturer will partner with T-Mobile to bring out its latest smartphone, the jumbo-size ZMax. More importantly, ZTE said that starting with the ZMax, every device in the future will carry its brand in the US, a sign of progress for a company that's struggled to build an identity here.

"Putting devices with the ZTE logo in your consumers hands is the No. 1 way to build your brand," Lixin Cheng, CEO of ZTE's US unit, said at a press conference Tuesday.

The ZMax represents the latest expression of ZTE's mantra: "affordable premium." The smartphone will retail for $252 without a service contract, or $10.50 a month for 24 months under T-Mobile's device payment program. It's an eye-catchingly low price when compared with the iPhone 6's off-contract price of $650.

ZTE executives Cheng and Andrew Elliot, senior director of marketing for ZTE USA, also say they're ahead of the trend for growing demand in large smartphones, known as phablets because they fall between a phone and tablet in size. The ZMax gets to draft off of the increased interest in phablets, brought into the mainstream by Samsung Electronics and its Galaxy Note line, as well as the jumbo 5.5-inch iPhone 6 Plus, which comes out Friday.

The ZMax boasts a 5.7-inch display and a large, 3,400 mAh battery, addressing another area consumers are interested in, Cheng said.

But beyond simply adding a larger display and bigger battery, ZTE hopes to stand out with the lower price.

Lixin Cheng, CEO of ZTE's US unit. Roger Cheng/CNET

"ZTE's ZMax combines the latest technology with distinctive design to give our customers an incredibly affordable large-screen smartphone," Jason Young, a marketing executive at T-Mobile, said in a statement.

ZTE boasts that it's the fourth-largest smartphone manufacturer in the US, but the company has remained under the radar for most consumers since entering the market in 2007. The company has sold most of its smartphones through prepaid service providers such as Boost Mobile, and claims it's the second-largest brand in the prepaid segment. Over the last few years, ZTE has had a mix of products that bore either its logo or a carrier's.

The ZMax is the latest in ZTE's campaign to build up its reputation in the US. The company already sponsors the National Basketball Association's Houston Rockets, and Cheng teased more promotional efforts with the NBA next month.

T-Mobile's ZMax flaunts massive 5.7-inch display (pictures)

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One thing ZTE won't do is invest heavily in mass market -- a tactic used to great success by Samsung and its Galaxy S franchise. Cheng said ZTE would stick with a grassroots campaign that would involve the consumer and their needs.

"That's how we're building our own brand," Cheng said.

Globally, ZTE is the fifth-largest smartphone manufacturer with 3.3 percent of the market, according to Gartner. Its market share has risen slowly -- it held 3 percent of the market a year ago -- but has advanced as a result of the company going after customers who are more budget conscious.

The ZMax is in some ways tailor made for T-Mobile. The carrier's introduction of device installment plans -- which puts the burden of the cost of a smartphone on the consumer -- has educated people on just how much their devices really cost.

An iPhone 6 costs $27.08 a month, or nearly three times as much as the ZMax. Cheng believes people are starting to understand the difference in cost, and believes his phone makes for a favorable device given its specifications.

"Consumers are becoming savvier about true cost of devices," Cheng said.