ZTE plans to target top tier

Firm wants to drop low-end tag, focus on high-quality products

ZTE Corp hopes to discard its often-used tag of "low-end mobile phone vendor" by increasing its production of mid to high-end smartphones this year, according to the company's top executives.

Attending the annual Mobile World Congress in Barcelona, He Shiyou, its executive vice-president, said ZTE more than doubled the number of smartphones it shipped in 2012, to 35 million (from 15 million in 2011), and that sales of the devices now account for 70 percent of its total mobile phone revenues.

"We aim to have smartphone shipments of up to 50 million this year," He said.

The Shenzhen-based company started mobile phone production 15 years ago, and has now emerged as the world's fifth-biggest smartphone seller with a 4.3 percent global market share during the fourth quarter last year, according to the latest research from International Data Corporation, the market intelligence company.

However, the company has long been labeled a "low-end mobile phone supplier", since it started in the business by selling low priced handsets in huge volumes to emerging markets such as China, India and some African countries.

"In general, mobile phones with a price above 1,000 yuan ($160) contributed only 10 percent to ZTE's handset revenues globally," He said.

ZTE now plans to focus on introducing smartphones targeted squarely at mid to high-end users, and increase that share of sales from 10 to 25 percent this year, he said.

In recent months, analysts have been commenting on how ZTE must launch a stronger challenge to the growing smartphone dominance of its two biggest rivals, Samsung Electronics Co Ltd and Apple Inc.

ZTE used the Barcelona event to unveil its 5.7-inch, Grand Memo handset - a size which is considered in the market as firmly in the screen dimensions between a phone and a tablet that Samsung has popularized in its market-leading Note range - and the ZTE Open, a smartphone running on Mozilla's Firefox OS open ecosystem.

As a company traditionally focused on business customers, ZTE also has to learn to enhance its branding to increase market share, He added at the launch.

"Our flagship smartphones mainly target the top 20 GDP markets such as China, the United States and Europe," he said, emphasizing that ZTE will strengthen both online and offline channels to win more customers.

In China, more than 80 percent of ZTE's mobile phones are sold through distribution channels run by telecom carriers, with the rest sold on the open market.

He added that in future, ZTE planned to open more shops.

"By 2015, we are hoping to be in the top three by market share, and in terms of branding image and also pricing segmentation, we want to reach the top five," he said.