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.)
A focus on 3G and smartphones has driven ZTE's handset growth in 2011. Here's more on its success in China and elsewhere.
- 3G & Android Shape China's Mobile Market
- ZTE Mulls Plant Plans in India
- ZTE Scores LTE TDD/FDD Deal
- Huawei, ZTE: Global Devices With Nice Prices
- ZTE's US Push Pays Off
- ZTE Sees Mobile Growth in the US & Europe
— Sarah Reedy, Senior Reporter, Light Reading Mobile