ZTE Expanding 2011 Line, Readies 4G LTE
By Joseph Palenchar On Nov 21 2011 - 5:01am
RICHARDSON, TEXAS –
China-based supplier ZTE is
preparing to launch three more cellular devices by year’s
end, including at least one 4G LTE device, ZTE USA CEO
Lixin Cheng told TWICE.
ZTE has already exceeded its 2011 goal of doubling the
number of cellular devices that it offers in the U.S. — at
Two other products due this year will be a mobile Wi-Fi
hot spot and a handset.
Cheng declined to say whether
this year’s LTE device would be a
smartphone or mobile data device,
but he did say the company would
expand its LTE devices in the first
half of 2012 to include two to three
products, including a smartphone
and a tablet.
Also in the first half of 2012, the
company plans to launch its first
voice-over-LTE (VoLTE) handset,
which promises to use spectrum
more efficiently for voice calling
because conversations are transmitted
as data packets over a 4G
LTE data network. The technology
makes it unnecessary to tie up voice
circuits for the entire length of a conversation.
Also sometime in 2012, the company
plans its first “smart device”
built on Google’s converged tablet/
smartphone Ice Cream Sandwich OS, but Cheng declined
to say if the first product would be a phone or tablet.
ZTE, which launched its first U.S. phone in 2008, is increasing
its focus on branded rather than white-label mobile
devices in the U.S. as it moves up-market from basic
phones and feature phones in a bid to gain share. Besides
cellphones, the company offers mobile Wi-Fi hot spots
and cellular USB modems in the U.S.
Most of the 28 ZTE devices available today in the U.S.
are co-branded with a carrier name and the ZTE name,
This year, U.S. carriers began promoting the ZTE brand
“in a bigger way” than in the past, he added.
ZTE is getting more attention from U.S. carriers because
of its ability to offer tier-one technology licensed
from such companies as Qualcomm and TI, deliver products
with a cost advantage over other tier-one handset
suppliers, and act more quickly on carrier requests
for new products compared to other tier-one suppliers,
Cheng said. “Normally it takes 12 to 18 months to launch
a product in the U.S. with a tier-one carrier, but it takes us
six to eight months,” he said.
Another factor that will further increase
ZTE’s share is the expansion
of iPhone availability through so
many U.S. carriers, he continued.
“The iPhone takes a lot of money
from carriers’ budgets for phones,”
he said of the high-cost devices. As
a result, “our value becomes even
more critical to carriers.”
ZTE has adopted what Cheng
called “the ACW business model,”
with A standing for American innovation
licensed from such companies
as Qualcomm, C standing for
Chinese efficiency in supply-chain
management and R&D, and W
standing for worldwide sales that
leverage economies of scale.
Last year, ZTE used those elements
to focus on B2B sales to carriers,
with products designed to carrier
specifications. Carriers had the
choice to get use their own brand or a co-brand on the
products, he said. By the end of last year, ZTE had products
placed with all tier-one and tier-two carriers except
for U.S. Cellular, Cheng said.
In 2011, ZTE entered a phase in which it is establishing its
brand by encouraging carriers to co-brand devices and by
participating in joint promotions. He continued. As part of the
brand-establishment effort, ZTE built regional sales teams to
“create demand in the field” in carrier-owned and indirect stores.
The establishment phase, in which brand awareness is
built up among salespeople and consumers, will take two
to three years, he said.
Citing an example of ZTE’s efforts to build
brand awareness, Cheng cited his partnership
with prepaid carrier Cricket, which is offering
the ZTE Score Android smartphone as “a
featured product for the rest of the year.” The
Score appears in print ads, outdoor advertising,
online ads and billboards, and Cricket and
ZTE might collaborate on some local TV ads.