Handsets drive ZTE earnings

Mobile device sales were the darling of Chinese vendor ZTE’s 1Q11 results, boosting net profit 15.9% despite only marginal growth in equipment sales.
Profit hit 127 million yuan (€13.4 million) after a 51% rise in revenue from devices including 3G, GSM and CDMA phones boosted the firm’s overall sales nearly 14% to 15 billion yuan.
The company states its overall market share improved domestically, and that it saw strong sales growth in developed regions including Europe and the US during the quarter. The overseas markets were mostly responsible for a 32% increase in profits to 3.25 billion yuan in 2010.
However, the headline figures mask potential problems in the firm’s infrastructure equipment business, with sales up just 1.5% year-on-year in 1Q11. Furthermore, telecom software and service sales fell slightly during the quarter.
Devices seem to be big business for Chinese vendors at present, with Huawei making the sector one of its core business focuses for the year ahead, after shipping 120 million units in 2010.