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January 31, 2013

ZTE Corp Plans on Manufacturing More High-End Smartphones in 2013

ZTE Corp, the fourth largest mobile phone handset maker in the world, announced that it plans to raise the production levels of high-end smartphones in 2013 to increase incoming revenue and profit margins.

Lv Qianhao, head of handset strategy, ZTE Corp, said in a recent statement that with smartphones anticipated to make up almost 70 percent of overall consumer device sales in 2013, the company is planning to exceed its earlier forecasts and manufacture and market more than 50 million smartphones by the end of 2013.

Although, ZTE Corp has garnered significant market share in the cellular phone sector, the margins have always been tight because it focused mainly on selling affordable mobile handsets. The narrow profit margins, in addition to significant project delay in the Telecom Equipment Business, have led the mobile phone handset manufacturer to witness a net loss of up to 2.9 billion Yuan for the year 2012.

Significant losses in 2012 have forced the company to increase its revenue for smartphones by up to 40 percent in 2013. Talking about this profit margin boosting plan, Lv stated that the company aims at raising the manufacturing and revenue percentage of mid to high end smartphones this year. He added that ZTE Corp is moving in that direction, while displaying the company’s new Grand Era and Grand S smartphones, and Grand Memo, a hybrid of phone and tablet, which is referred as ‘phablet.’

With this view, the company has hired a fresh German-based chief design director, Hagen Fendler, who has an experience working with Huawei Technologies Co. Ltd. as the chief design director for mobile phone handsets.

In 2012, the company shipped almost 35 million smartphones. However, due to stiff competition from Samsung and Apple in the segment of tablets, ZTE missed its target. Last year, the company shipped half a million tablet PCs, which fell short of its target to double the sales to almost one million. However, the company was not ready to give any projections on its tablet sales this year.

In the smartphones sector, ZTE Corp ranks fifth in the world, following Apple, Samsung Electronics, Sony Corp and Huawei, according to a report published by the technology research group, IDC. ZTE’s tablet PCs primarily run on Android, but this year, as a part of product diversification, almost 10 percent of the total tablets shipped by the company will run on Windows platform. 

Edited by Brooke Neuman

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