ZTE looks like it’s getting a chance to resurrect its business, thanks to help from the highest office in the United States. Last week, the China telecom giant announced that it had to cease business activities because of US sanctions on critical components.
The uptake of 4G-LTE is expected to grow to pass one billion by 2017, according to a new study by GSMA Intelligence. This translates to one in eight of the more than eight billion total mobile connections forecast by that point, up from 176 million LTE connections at the end of 2013. And around half of these are expected to be in Asia.
Nearly 500 LTE networks are forecast to be in service across 128 countries, roughly double the number of live LTE networks today.
“Since the launch of the first commercial 4G-LTE networks in late 2009 we are seeing deployments accelerate across the globe,” said Hyunmi Yang, Chief Strategy Officer of GSMA. “Our new report highlights a number of factors that are driving LTE growth: the timely allocation of suitable spectrum to mobile operators; the availability of affordable LTE devices; and the implementation of innovative tariffs that encourage adoption of high-speed data services. Mobile operators in both developed and developing markets are seeing LTE services contributing to a significant increase in ARPU.”
China smartphone makers looking to take their domestic success globally need to carefully consider their expansion strategies, according to Frost & Sullivan.
While the China market has been driven by demand for cheap devices that offer a unique range of services such a virtual goods, messaging apps, and photo sharing, the more mature Western markets are very different, with carrier relationships, strong brand equity, and innovative features crucial to success.
Along with Huawei and ZTE, three interesting China companies have ambitions to take their smartphone businesses international: Lenovo, Yulong Coolpad and Xiaomi. The first and most successful China smartphone company is Lenovo, which has the largest smartphone market share of China companies, second only to Korean giant Samsung in China. Lenovo is also one of the most diversified China electronics companies, with a broad portfolio. The company has already achieved success on the global stage with its PC business, now the world’s largest after overtaking HP in 2012.
ZTE’s handset business has seen steady development and profit growth during 2012. Industry analyst IDC reported that ZTE had shipped 65 million handsets in 2012, accounting for 3.8 percent of the global handset market and confirming ZTE as one of the top 4 handset producers.
“We know that our future success means we have to build the ZTE brand, and another target for us is to be a top 5 vendor in terms of brand awareness and reputation within the next three years,” said He Shiyou, EVP and Head of the Mobile Devices Division at ZTE. “2013 is the final year of our three-year transformation into a high-end smartphone brand, but we have a lot of building still to do.”