Chinese LTE boosts ZTE to nearly double yearly profit

Chinese telecommunications equipment maker ZTE has increased its total profit by 98 percent while only bumping up its revenue by 8 percent.

Preliminary yearly financial results posted by ZTE yesterday show the telecommunications equipment maker and handset manufacturer set to go close to doubling its profit for the year to the end of December 2014.

The guidance issued showed revenue hit 81.2 billion yuan ($13 billion), with net profit up 94 percent to 2.64 billion yuan, and operating profit improving from the 1.5 billion yuan loss last year to come in at 104 million yuan.

ZTE said that its profit growth was due to sales of time-division duplex long-term evolution (TD-LTE) and frequency-division duplex LTE (FDD-LTE) equipment in China, and an increase in its handsets in international markets, as well as improved contracts and expenses control.

In December, the company said it aimed to ship 60 million smartphones in 2015, and would be focusing on two or three core products, rather than the plethora of white-label handsets that the company is known for.

"We had a large volume in the market, but it did not help increase our brand value," said Zeng Xuezhong, CEO of ZTE mobile devices, at the time. "We have introduced a strategy to increase the value, instead of the volume, of our products by focusing on developing core technology in major devices."

ZTE also holds a large patent portfolio, and is the second-most prolific filer of patents worldwide, behind Panasonic.

Lixin Cheng, chairman and CEO of ZTE US, told ZDNet in October that respecting intellectual property laws is important in a mature Western market like the US.

"The product [has to be] innovative by itself, but also, if you utilise others' technology, you better pay the licence so that you have a better position to defend yourself when other guys come after you," he said.

"If other companies want to come here as a copycat, that would be a disaster, and they would be sued out of the business very quickly.

"In terms of patents, you cannot afford this kind of mistake -- and I see so many mistakes from others."