ZTE creates separate mobile unit, promises to be more efficient

Chinese handset and network gear vendor ZTE is creating a separate mobile devices unit as part of an organizational restructuring aimed at beefing up its presence in smartphones and mobile.

The company said that in 2014 it will focus on three key businesses: operators, mobile devices and enterprise customers. As part of that shift, ZTE formed a separate mobile device business group, led by Executive Vice President Zeng Xuezhong, who was previously in charge of ZTE's operations in China. He Shiyou, an executive vice president at ZTE and the former head of its terminals business, will remain as an executive director.

According to ABI Research, ZTE was the No. 6 overall global handset maker in the third quarter of 2013. However, the company ranked ninth in the world as of the third quarter in terms of smartphone shipments, according to research firm Canalys. ZTE spokesman David Dai told the Wall Street Journal that the firm aims to be the world's top three handset maker by shipments in 2016.

Multiple handset makers have publicly stated that goal, aiming to get the No. 3 global spot behind market leaders Samsung Electronics and Apple (NASDAQ:AAPL). Research firms Strategy Analytics and IDC reported that ZTE's larger rival, Huawei, claimed the No. 3 spot in the third quarter of 2013.

ZTE said it will increase its efforts to target three emerging market segments: metropolitan public IT systems, new energy technology and mobile Internet. Meanwhile, the company said it aims to become more profitable via its new management structure, and also be a "market leader in 4G." The company said it will pursue breakthroughs in LTE network equipment, chipsets and devices.

ZTE plans to launch a smart watch of its own in the second quarter of 2014 to challenge Samsung and others, Lu Qianhao, ZTE's head of handset marketing strategy, said in late November. In an interview with the Journal, Lu said ZTE's smart watch will offer features that are similar to existing products such as Samsung's Galaxy Gear, but will be cheaper in an attempt to grab more market share, especially in China. ZTE expects to announce smart watch in the first quarter of next year (perhaps at a trade show such as the Consumer Electronics Show or Mobile World Congress) and start selling it in the second quarter, Lu said.

ZTE also said Pang Shengqing, a senior vice president, has been appointed as head of ZTE's enterprise business. ZTE said it anticipates that rising demand for cloud-computing, big data, the Smart City and the Internet of Things will help drive growth in the company's enterprise business.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this PhoneScoop article

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