ZTE more than doubled its target shipment of smartphones in 2012. The growth in smartphone sales helped ZTE post a gross profit margin of 16.8 percent in its terminals division in 2012, an improvement of 1.6 percentage points compared to a year earlier.
In the US, ZTE’s smartphone shipments greatly increased due to the company’s focus on high-end markets. In emerging markets including India, Indonesia, Mexico, Argentina, and Russia, ZTE also achieved fast growth. In 2012, the distributors channel contributed 10 percent of ZTE’s terminal revenue for the first time.
The strong smartphone sales performance helped ZTE record RMB1.87 billion of operating cash flow in 2012. ZTE also posted positive free cash flow and operating cash flow for the first time in three years.
“ZTE aspires to be the global leader in 4G, and shape the future of smart devices,” said He Shiyou, Executive Vice President and Head of the Mobile Devices Division at ZTE. “For ZTE’s terminals business, 2012 was a year of transition that brought increased scale, profitability, and a higher profile. The shift to higher value will continue in 2013.”
The strong growth in ZTE’s smartphone business lifted he company to be the world’s No. 4 manufacturer during 2012, and helped offset decreasing sales of feature phone products.
Last year, ZTE unveiled its Grand series to strengthen the company’s positioning at the high-end of the market. ZTE generated 15 percent of its smartphone revenue in 2012 from sales of mid to high-end devices in 2012, and He aims to grow the proportion to 25-30 percent this year