Optical/IP Networks

Devices Drive ZTE in Q1

ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) device sales rose 51 percent in the first quarter of 2011, driven by growth in 3G handset sales outside China. (See ZTE Reports Q1 .)

The equipment maker's carrier networks division grew, too, by about 2 percent over last year, though its telecom software systems business saw a slight decline in sales.

The company said that it stepped up its research and development efforts into new products and technology in the quarter and is continuing to explore new market opportunities.

Overall, for the quarter ending March 31, ZTE posted a net profit of CNY127.3 million (US$19.4 million), a 16 percent increase over the previous year. Operating revenue grew 13.8 percent to CNY15.1 billion ($2.3 billion).

Why this matters
ZTE is quickly sharpening its focus on Western markets, targeting first-time smartphone owners with low-cost Android devices. The company says it will keep its Western momentum going by exploiting opportunities in increased broadband penetration, wireless network equipment upgrades and global demand for smart terminals.

The way ZTE's growth has been achieved in Western markets, however, has upset some of its competitors. Like Chinese rival Huawei Technologies Co. Ltd. , it has battled security concerns abroad, as well as its fair share of lawsuits. The company provided an update on its ongoing legal battle with Ericsson AB (Nasdaq: ERIC) over patent infringement, noting that litigation currently taking place in the U.K., Germany and Italy did not have an effect on financials for the period. (See Ericsson Sues ZTE Over IPR Theft.)

For more
A focus on 3G and smartphones has driven ZTE's handset growth in 2011. Here's more on its success in China and elsewhere.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

Gabriel Brown 12/5/2012 | 5:07:11 PM
re: Devices Drive ZTE in Q1

Re, this part: ZTE is quickly sharpening its focus on Western markets, targeting first-time smartphone owners with low-cost Android devices.

I can totally see that. I picked up an Orange San Francisco Android device (actually a ZTE Blade) for £90 on PAYG to mess about with.

Install a de-branded Froyo 2.2 ROM and you actually have an okay device. In some ways it's incredible value relative to iPhone and the £500 superphones.

My wife's now using it as her main phone. She seems to find it acceptable (just about).

EDIT: this is probably the best all round value device on the market in the UK at the moment, inspite of its drawbacks.


Gabriel Brown 12/5/2012 | 5:07:10 PM
re: Devices Drive ZTE in Q1

"If the hardware is up to snuff"

I should probably point out, then, that the Blade's WiFi crashes our home network all the time, so I turned it off. 3G only now. Also, it's very hard to see the screen in direct sunlight. The buttons are plasticky too.


sarahthomas1011 12/5/2012 | 5:07:10 PM
re: Devices Drive ZTE in Q1

That's interesting that the phone is so popular among hackers. So the price point is the main appeal, and then you can update as you see fit to make it more valuable?

ZTE (and Huawei) both stressed that their main selling point is not price, but I don't think that's a bad differentiator. If the hardware is up to snuff, and you can do what you want with the software, then price is reason enough to buy it.

PS. I much prefer Blade to San Francisco for the phone's name.

Sign In