Cheap handsets hurting margins too much
Chinese mobile giant ZTE has reaffirmed its plans to ship more high-end smartphones this year in a bid to increase profit margins and revenue.
Last week the company, rated as the world’s fourth-biggest handset maker, flagged a net loss of 2.9 billion yuan ($467 million) for 2012 after poor Q4 results.
But according to Lv Qianhao, head of handset strategy, ZTE is back on track and aiming to ship more than 50 million smartphones this year.
He told Reuters that its margins had been squeezed by selling low end phones, especially in its own country, but now expected smartphones to make up 70 per cent of overall consumer device sales in 2013.
“We would like to raise the percentage of mid- to high-range smartphones. That’s the direction we’re heading,” Lv told the news agency as he showed off the Grand S and Grand Era smartphones, and the Grand Memo phone-tablet hybrid, aka ZTE’s “phablet”.
ZTE shipped 35 million smartphones in 2012 with smartphones accounting for 60 per cent of overall consumer device sales.
It has also hired a new chief handset designer, Hagen Fendler, a German poached from Chinese rival Huawei Technologies.
In 2012 ZTE shares halved in value, despite a 23 per cent rise in the Hang Seng Index, but have since rebounded 13 per cent this year.