Chinese smartphone vendor ZTE has quietly climbed the ranks of U.S. smartphone vendors, and now commands the market's No. 4 position, just behind LG, Samsung and Apple. As Bloomberg notes in a new report on the company, ZTE is now working to cash in on its position with more expensive -- and more profitable -- smartphones.
ZTE's growth is noteworthy considering the company competes against a number of other smaller-scale smartphone vendors in the United States, including Huawei and Lenovo. Although Huawei has worked to break into the U.S. market with higher-end smartphones, most U.S. wireless carriers don't sell Huawei smartphones directly to their subscribers. Lenovo too has attempted to increase its presence in the U.S. market, largely through its purchase of Motorola from Google in 2014 for close to $3 billion.
ZTE, on the other hand, has used low-end smartphones like the Maven for AT&T and the Zmax for T-Mobile, as well as a range of lower-end devices for prepaid providers, to grow its share of the smartphone market in the United States to around 8 percent in the second quarter of this year, according to IDC, up from 4.2 percent in the first quarter of last year.
However, as Bloomberg noted, ZTE's revenue in the United States has only increased around 4 percent during the past year, to $369 million. Thus, the company is hoping to boost its revenues and margins in the U.S. market with the sale of higher-end phones like its new Axon Pro. The device is currently available unlocked through Amazon and other retailers.
"ZTE is taking the long view," Peter Ruffo, senior director for ZTE's U.S. government relations, told Bloomberg. "We are very patient."
ZTE's improved position in the U.S. smartphone market is noteworthy considering the company has been effectively blocked from the U.S. network infrastructure market since 2012, when a House Intelligence Committee warned that products from ZTE and Huawei could be used by the Chinese government for spying. Both companies dispute that assertion, but nonetheless have been largely prevented from selling network equipment to U.S. wireless carriers.
As a result, ZTE turned its eyes to the smartphone market, recently inking marketing deals with the Houston Rockets, New York Knicks and Golden State Warriors to boost its profile. And, as Bloomberg notes, ZTE has also increased its spending on Washington, D.C., lobbying from just $170,000 in 2011 to close to $1 million last year.
- see this Bloomberg article
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