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ZTE : Smartphones -- 2015 Analyst Event

by Neil Mawston | Jul 13, 2015

There are hundreds of analysts and media worldwide attending ZTE's 11th Global Analyst Conference in Shanghai, China, today. Our analysts from our Wireless Smartphone Strategies (WSS) service also joined the event.

The keywords for this event are “M-ICT”, “smart”, “+”, “connected” and “innovation”. ZTE plans to increase its investment in innovation in the following years to provide its clients with more value-added, smart, mobile, connected devices.

The key theme of Day One is about the corporate overall performance review and strategy outlook. In 2014, company overall revenue increased +8.3% YoY to RMB 81.47 billion (US$13.14 billion). Company net profit also improved, with 94% growth rate to RMB 2.63 billion (US$0.42 billion). Overseas market accounted for over half of its total revenue. Around 100M ZTE mobile devices were shipped worldwide in 2014, in which 48M were smartphones. Its smartphone accounted for around 70% of total revenue of mobile devices.

For the smartphone business, in which ZTE ranked the seventh largest smartphone vendor by volume worldwide in Q1 2015, according to a report from our Wireless Smartphone Strategies (WSS) service, ZTE targets to ship 60 million smartphones in 2015 and double its shipment of premium products to comprise 45% of total smartphone shipment. It also plans to be the top 3 OEMs in the major markets by 2020. Strategy Analytics considers that ZTE's flagship models which will be available in the second half of 2015 must be successful to reach premium tier 45% target in 2015.

From the market perspective, ZTE will focus its resources in key countries. It will leverage its strong position in the US market to build global brand and technology and focus on production and supply chain in China to consolidate design and production capabilities and then based on the good positions in the US and China to gain global presence in other major countries. SA believes leveraging prepaid advantage and attacking postpaid segment, unlocked segment, watching closely other Chinese OEMs and BLU etc. will be the key methods to maintain the leading position in the US for ZTE.

From the branding perspective, ZTE will adopt “dual brand” strategy. “ZTE” will be its global consumer brand with three product lines: Grand, Star and Blade while “Nubia” is its Internet brand sold through on-line channel only. SA believes Nubia needs something special to fight against its competitors such as Honor, Xiaomi, Dazen and etc. ZTE plans to increase its investment in branding in the following three years to improve its brand recognition and targets to be the top 3 smartphone brands in key countries by 2020.

Besides, ZTE will continue its sports marketing to solidify partnership with NBA. It will also cooperate with Baidu, Tencent and Google to strengthen its position in the on-line channel. Moreover, ZTE will build and expand workforce in the major markets to increase its depth of localization to reach the target of top 3 OEMs in these countries.

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