ZTE has big plans for the U.S., and doesn’t want any competition from the likes of Xiaomi, one of this year’s most talked-about Chinese smartphone brands. According to Lixin Cheng, CEO of ZTE’s U.S. operations, the target has been set to double previous sales this year, then pass LG’s total market share to take the U.S. number three spot within two years.
Currently, ZTE’s position in the market is confused. It says it’s the fourth largest smartphone manufacturer in the U.S., but that may depend on who is publishing the figures. For example, ComScore data from July didn’t put ZTE in the top five, but did place the resurgent LG in third. In China, ZTE may also be having a tough time, with reports suggesting it has fallen out of the top five manufacturers, against increased competition from both local and international companies.
Cheng says ZTE sold 10 million smartphones in the U.S. during 2013, and is aiming for 20 million this year. To help achieve this, ZTE has announced a variety of competitively priced devices, including the cool, $280 Nubia 5S Mini, and the timely, $250, 5.7-inch ZMax. Earlier this year, ZTE said it would increase its marketing budget in the U.S. to $120 million, and signed a high-profile sponsorship deal with the Houston Rockets basketball team at the end of 2013.
What ZTE doesn’t want is Xiaomi muscling in to ruin its grand plan, and set out a stark warning to the growing company. Cheng says Xiaomi’s preferred method of selling unconnected phones online won’t work in the U.S., where 95 percent of sales are made via a network, and hardware is usually a collaborative effort. He says it took ZTE more than a decade to gain a foothold in America, and gaining the trust of networks is an essential part of the process. Xiaomi will have to change if it’s to stand a chance, hints Cheng.
This doesn’t mean ZTE is blind to Xiaomi’s success, and is also building up its own online sales channels, from opening an Amazon-based official store tailored to U.S. buyers, to pushing a dedicated online store in a similar style to Huawei’s VMall.com.
ZTE’s ethos of producing affordable, but premium smartphones may not always work, but the new ZMax costs a third of the iPhone 6 Plus, and has therefore come at the right time to win it fans. Will it be enough to give ZTE the boost it clearly desires?
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