ZTE to ship 80 mln smartphones in 2015 vs 60 mln 2014 goal

SHANGHAI/HONG KONG Mon Jun 9, 2014 2:08pm IST

ZTE smartphones Grand Memo Lite (L) and Grand S are displayed during a news conference in Taipei October 12, 2013. REUTERS/Pichi Chuang/Files

ZTE smartphones Grand Memo Lite (L) and Grand S are displayed during a news conference in Taipei October 12, 2013.

Credit: Reuters/Pichi Chuang/Files

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SHANGHAI/HONG KONG (Reuters) - ZTE Corp, the world's seventh-biggest smartphone maker, aims to ship more than 80 million of the devices globally next year as it chases higher-margin contracts and benefits from China's introduction of 4G telecom networks.

Shenzhen-based ZTE, which shipped about 40 million smartphones last year, also aims to ship about 100 million in 2016, executive vice-president Zeng Xuezong told Reuters in an interview on Monday.

"We will make more and more premium smartphones," Zeng said, adding that at least 60 percent, or 48 million, of the shipment target for next year would be handsets compatible with fourth-generation (4G) communications networks.

"Only by doing so can we get positive feedback from consumers and achieve growth," Zeng said.

The company told Reuters in April that shipments of its premium smartphone Nubia will grow at least 300 percent year on year in 2014.

Zeng also expected revenue from the company's terminal device unit, which sells smartphones and tablets, to grow more than 15 percent in 2014 from a year earlier.

The forecast for higher 4G smartphone shipments comes at a time when ZTE and rival Huawei Technologies Ltd [HWT.UL] are set to reap the rewards of contracts to build high-speed 4G mobile networks at home and abroad.

ZTE predicts global spending on 4G will be $100 billion in 2014 and that spending in China will be 100 billion yuan ($16.13 billion).

The company is also targeting the fat profit margins promised by sales of high-end phones in the United States even after government officials flagged security concerns about Chinese-made network equipment, which has been mostly shut out of the U.S. and other markets.

Chinese cellphone makers are also grappling with low brand awareness in the world's second-largest smartphone market and perceptions of inferior quality.

"There's indeed a gap between the brand awareness of Chinese companies and those top global brands, and this is what our team is trying to build for consumers," Zeng said.

At home in China, the world's largest mobile phone market with more than one billion subscribers, ZTE competes with both Samsung Electronics Co Ltd and Apple Inc, as well as domestic makers Lenovo Group Ltd, Huawei and privately held Xiaomi.

ZTE's Hong Kong-listed shares rose 0.3 percent on Monday, versus a 0.7 percent increase in the Hang Seng Index.

(Reporting by Adam Jourdan in SHANGHAI and Yimou Lee in HONG KONG; Editing by Anne Marie Roantree and Christopher Cushing)

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