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ZTE Reorgs for Mobile Device Domination

Sarah Reedy
1/2/2014
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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

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Simon@
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Simon@,
User Rank: Light Beer
1/9/2014 | 3:40:37 AM
Top5
Top 3 likes a dream but who know what will happen  tomorrow in telecom industry . whatever it is a very big challange target .  top 5 is a practical target based on the current situation .

 
SarahReedy
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SarahReedy,
User Rank: Blogger
1/6/2014 | 11:59:54 AM
Re: More smartphone competition from China
They are taking the opposite approach of Apple, it appears. Apple under-promises and over-delivers. ZTE could be headed for over-promising and under-delivering, even if top 5 is still pretty good.
MarkC73
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MarkC73,
User Rank: Light Sabre
1/5/2014 | 10:22:30 PM
Re: More smartphone competition from China
Still top 3 is a pretty ambitious goal, though if they move up in ranks to 4th or 5th by 2016 they could still call it a win, I'd be surprised to see them move that fast with the current players in the market today.  Then again, I guess stranger things have happened.
SarahReedy
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SarahReedy,
User Rank: Blogger
1/3/2014 | 9:52:21 AM
Re: More smartphone competition from China
Speaking of not well-known brands...like I said, the market changes fast and anything is possible! Seems like Samsung's dominance may be waning a bit and thirst for lower-cost handsets is growing. It's a good time for these lower-end Android smartphone makers to make a big push. Question is, how will they differentiate?
Ray@LR
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Ray@LR,
User Rank: Blogger
1/3/2014 | 4:02:11 AM
More smartphone competition from China
meanwhile, the #3 smartphone player in China, China Wireless Technologies, is planning to double sales this year and sell 40 million 4G devices...

 

http://finance.yahoo.com/news/china-no-3-smartphone-maker-081028158.html
MordyK
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MordyK,
User Rank: Light Sabre
1/2/2014 | 3:45:34 PM
Re: CES and mobile
so true. What looks like brilliance one day, looks like sheer folly the next.
SarahReedy
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SarahReedy,
User Rank: Blogger
1/2/2014 | 2:44:55 PM
Re: CES and mobile
BB shows how quickly things can change, as does Samsung, HTC and Nokia. So, ZTE might be a nobody today, but probably shouldn't count them out yet.
SarahReedy
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SarahReedy,
User Rank: Blogger
1/2/2014 | 2:44:16 PM
Re: CES and mobile
Yeah, it's hard to know which strategy will pay off. Depends on the market too, since operator-branded phones are big sellers a lot of places either. Huawei eventually moved to playig up the Ascend line too. So, I guess ZTE's choices are to try to improve their brand awareness, white label, or pick a random verb/cool word to make their phone line instead. Partnering with brands that do have cache might help too.
MordyK
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MordyK,
User Rank: Light Sabre
1/2/2014 | 2:01:17 PM
Re: CES and mobile
They ought to learn from the no brand approach HTC took. While their products were always more advanced and designed nicer, they got zero brand loyalty and thats biting them today. That said just ask BB and they'll tell you that brand won't get you everywhere either,
Dan@LightReadingMobile
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Dan@LightReadingMobile,
User Rank: Blogger
1/2/2014 | 11:56:03 AM
Re: Can it crack the top 3?
I'll skew the results cos I walk to and from the hotel too.
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