ZTE Reorgs for Mobile Device Domination
ZTE wants to be a top three mobile device maker, and it's reorganizing its entire business to help accomplish that goal. (See ZTE Revamps Its Top Team.)
The Chinese telecom equipment vendor announced changes Thursday that will see it focus on what it views as the most strategic and the highest-growth mobile trends for 2014: operators, mobile devices, and the enterprise.
ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) also says it will step up its efforts to target three emerging market segments: metropolitan public IT systems, new energy technology, and mobile Internet. It sees increased demand for cloud computing, big data, smart cities, and the Internet of Things driving growth in its enterprise business. It aims to lead the 4G space with its equipment, semiconductors, and devices.
Specific changes to create a flattened management structure include:
- ZTE Mobile Devices is being spun out as an independent unit of the company to be led by current executive vice president Zeng Xuezhong. Former head of terminals He Shiyou will become executive director of ZTE Corporation.
- Pang Shengqing, senior vice President of ZTE, will take over ZTE’s enterprise business.
- ZTE EVP Zhao Xianming has been named the company's chief technology officer.
Why this matters
ZTE is the smallest of the telecom equipment vendors, but it has gotten good traction in Asia with 4G LTE contracts. It currently counts over 500 operators in 160 countries on its customer roster. ZTE is also targeting a big presence in the emerging software-defined networking (SDN) space, but its primary focus with today's reorganization is to beef up its presence in the mobile device space.
The company reiterated to the Wall Street Journal that it aims to be one of the world's top three handset makers by shipments by 2016. At the latest count by Canalys.com Ltd. , ZTE is number nine. By creating a separate handset business it hopes to be more agile and get new smartphone models to market more quickly, although it will have its work cut out for it in creating brand awareness and competing against Apple Inc. (Nasdaq: AAPL) and Android.
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— Sarah Reedy, Senior Editor, Light Reading