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ZTE to churn out more 4G devices

A woman stands in front of a ZTE company logo during the company's 15th anniversary celebration in Beijing April 18, 2013. REUTERS/Barry Hua
A woman stands in front of a ZTE company logo during the company's 15th anniversary celebration in Beijing April 18, 2013. REUTERS/Barry Hua

By Lee Chyen Yee

HONG KONG (Reuters) - China's ZTE Corp, the world's fifth largest smartphone maker, is aggressively moving into the higher end of the market for mobile gadgets with more 4G shipments.

The Shenzhen-based company has been trying to move away from selling lower end mobile phones, a strategy that has served it well in boosting its global market share, but at the expense of pressuring margins and profitability.

It plans to further raise its global profile by sponsoring a U.S. National Basketball Association (NBA) team later this year, executives said.

"We're working towards a goal of 4G LTE (Long Term Evolution) gadgets making up 40-50 percent of our total consumer devices shipments by 2015. The percentage is quite small now -- about 4 percent," Lv Qianhao, ZTE's head of handset strategy, told reporters in China's southern city of Guangzhou, where 4G LTE trials are being conducted.

ZTE is banking on products such as its Grand Memo phablet -- a cross between a phone and a tablet, and its Grand S smartphone to battle the likes of Samsung Electronics Co Ltd, Apple Inc that have been dominating the market.

On Friday, ZTE executives showcased its LTE technology to reporters in a mini-van by driving through skyscrapers around a section of Guangzhou city while downloading video clips on its smartphones at speeds that are several ten-fold faster than 3G.

ZTE has been working closely with China Mobile Ltd, the world's largest wireless carrier by subscribers, in 4G trials throughout the country that has more than a billion mobile phone users.

Even though ZTE's flagship telecom equipment business has hit stumbling blocks in entering the U.S. market due to Washington's national security concerns, its mobile phones have been selling quite well, ZTE executives said.

"We have plans to sponsor an NBA team that Chinese consumers will say wow to, but we are still negotiating and nothing has been decided," ZTE spokesman David Dai said.

In the first quarter, ZTE cornered a 9.1 percent market share in global smartphone shipments, ranking behind Samsung, Apple, LG Electronics Inc and Huawei Technologies Co Ltd, research firm IDC said.

(Editing by Elaine Hardcastle)

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