ZTE shifts focus

ZTE has taken a number of bold steps to move beyond the B2B market and reach out to consumers to build brand awareness for its lineup of smartphones.
In the US it has signed a one-year corporate sponsorship deal with the Houston Rockets basketball team for an undisclosed amount. The agreement, which can be extended to three years, is the first of its kind for ZTE and is a major shift for the company that is well known among telcos but lacks brand recognition among consumers in most markets outside of China.
The company held a press conference in Taipei on Sunday (before the pre-season game between the Rockets and Indiana Pacers) to announce to the Asian media the agreement that also includes being the official smartphone partner of the Rockets for the 2013-14 season. ZTE introduced a special edition white Grand S with the Rockets’ logo, which the company says will be carried by the team’s personnel.
On hand for the Taipei media event for the Rockets were CEO Tad Brown, VP of corporate development John Croley as well as Rockets’ star Chandler Parsons and Hall of Famer Clyde Drexler.
As part of the agreement, ZTE will receive use of Rockets marketing rights, TV-visible branded signage, and can target fans for giveaways and promotions at branded kiosks at home games and through in-game activations. The deal was first announced in early October in Houston.
While the company has a close relationship with the US carriers, which distribute (and subsidize) about 95% of the phones sold, ZTE USA chairman and CEO Cheng Lixin said it aims to push product through the open market and thus needs to boost brand awareness. Beyond the solid base of carriers, he said it will focus on online stores, such as Amazon, and big-box retailers like Walmart and BestBuy.
ZTE, which has been in the US for 15 years, is ranked fourth in smartphone sales in that market and aims to break into the top three within three years, he said.
Cheng said ZTE’s lineup of smartphone is positioned as “affordable premium phones”. “If you only focus on cost, not offering a premium product, you don’t create value. We’ve been quite successful because of the premium experience we offer.”
Outside of the US, ZTE also announced today in Beijing it is the principal partner of NBA China and the exclusive handset partner. The agreement covers the Greater China market, including Taiwan and Hong Kong.
David Dai, ZTE’s director of global branding and communications, told TelecomAsia.net that the US is on pace to overtake China as its largest market for smartphones within 20 months. Clearly demonstrating the pace of growth in the US, Dai noted that last year the company’s China’s smartphone revenue was twice that of the US market.
The company’s smartphone sales jumped 54% in Q2 from a year ago to 9.7 million from 6.3 million, according to Gartner. Despite seeing its global market share edge up to 4.3% from 4.1% during that period, it dropped to fifth in the rankings after LG (5.1%) and Lenovo (4.7%) with a gap of less than two million units.
For those following Linsanity, the Rockets won 107-98 and Jeremy Lin, making his “homecoming” to Taiwan before a boisterous crowd of almost 13,000, made 17 points before fouling out midway through the fourth quarter.