ZTE bets on smartphones

ZTE Corp, the world's fourth-largest mobile phone manufacturer by shipments, aims to increase the number of smartphones it produces this year to 35 million, according to a company executive.

But for all types of mobile phones, ZTE is likely to ship about the same number in 2012 as it had last year, He Shiyou, executive vice-president of ZTE, said at a Beijing news conference on Monday. "We will secure our position as the world's No 4 mobile phone manufacturer."

According to the market research firm IDC, ZTE sold 66.1 million mobile phones in 2011, securing a 4.3 percent share of the global market that year.

He said he expects ZTE to ship between 30 million and 35 million smartphones by the end of the year. In the first six months of 2012, ZTE shipped more than 13 million of the devices, an achievement He described as being "right on track".

The company also hopes to receive a further boost in the second half of 2012 with the release of its quad-core, ultra-thin Grand Era smartphone. ZTE officially introduced the device in Beijing on Monday.

"Grand Era exhibits the stature that ZTE has in the manufacture of advanced, high-end smartphones," He said. "However, ZTE will not stay at this level. The company needs to move on."

In an interview in February, He expressed ZTE's ambition to challenge Apple Inc and Samsung Electronics Co Ltd in the advanced smartphone industry.

He also said ZTE is developing its own mobile operating system.

Noting that Apple and Samsung have sued each other over alleged patent infringements, He said ZTE will not put all of its smartphone eggs into one basket. "We will avoid relying too greatly on one single operating system," he said.

For the first time in its history, ZTE has become the world's fifth-biggest maker of smartphones, reaching that milestone in the second quarter of the year, according to an IDC report released in July.

ZTE shipped 8 million smartphones during that period, giving it a 5.2 percent share of the market for those devices. That put it just behind its Taiwanese rival HTC Corp, which had an 8.8 percent share, and the Finnish phone giant Nokia Corp, which had a 10.2 percent share.

The chief source of ZTE's gains has been its shipments of inexpensive, entry-level smartphones in the Chinese mainland, where the company is based, the report said. The IDC report also said the company has been selling a larger number of smartphones in other countries, particularly in the United States, "where its smartphones can be found under other brands".

Neil Mawston, an analyst with Strategy Analytics, said ZTE is moving quickly into the entry-level and mid-range smartphone business.

"The United States represents the world's largest pool of mobile phone profits," he said. "Chinese manufacturers will need to play a bigger role there to become more profitable."