​ZTE attributes 1.77b yuan H1 profit to increase in market share

ZTE has reported overall operating revenue of 47.76 billion yuan, with the Chinese smartphone manufacturer attributing the 4 percent revenue growth to its increasing market share.
Written by Asha Barbaschow, Contributor

ZTE has announced its results for the six months ended June 30, 2016, reporting net profit of 1.77 billion yuan on operating revenue of 47.76 billion yuan, with domestic operating revenue accounting for just over 58 percent of the total, coming in at 27.8 billion yuan.

The reported operating revenue for its carrier networks business in the first half of the year was 28.74 billion yuan; operating revenue for government and enterprise business amounted to 4.61 billion yuan; and operating revenue for the consumer business came in at 14.42 billion yuan.

ZTE invested close to 15 percent, or 7.06 billion yuan, of its total revenue this half on R&D, the largest investment the company has made to date. The smartphone maker said it will continue to invest in R&D, expecting such investment to contribute to the sustainable development of the company.

"In the mobile network operator market, ZTE has continued to develop innovative new solutions and increase its market share," the company said.

"The company ranks first in 4G global shipments -- as it has for three consecutive years -- and has successfully increased its market share in both wireless and wired markets."

Similarly, ZTE said it has the highest global market share in IPTV as a result of breakthroughs in high-end routers, including the T8000, for commercial use. ZTE also said it has the second-highest global market share in passive optical network (PON) telecommunication transmission networks.

In Q2 2016, ZTE said it joined the ranks of the top six global smartphone manufacturers, coming in fourth in North America and hot on Huawei's heels in Australia with 3.5 percent of the country's market share.

In the enterprise business, ZTE said Smart City remains a key engine of its growth, with new orders increasing year-on-year to 40 percent. ZTE Smart City solutions have now been implemented in 145 cities worldwide, the company said.

For the financial year ended December 31, 2015, ZTE pulled in 100.8 billion yuan in operating revenue, bumping up revenue by 23.8 percent from its 2014 results.

Operating profit tipped 1 billion yuan, a percentage change of 1,631.8 percent year-on-year, and net profit came in at 3.778 billion yuan, up 44 percent from the previous year's 2.63 billion yuan.

At the time, the company attributed its record growth to the PON and optical access systems investment that was made by China's leading carriers, and the increased sale of its high-end routers to international government and corporate customers.

In addition to continuing the R&D spend, ZTE said that looking forward to the second half of its financial year, it hopes to grow the business by leveraging a "restructuring industry".

"The company will focus on major strategic directions, namely: In-depth development of the carriers' market; value creation in government and enterprise business; integration and innovation in the consumer market; and driving business development in the VOICE sectors," ZTE said.

When announcing its financial results, ZTE also unveiled its new company strategy, M-ICT 2.0, which it hopes will drive the company's growth over the next five years.

According to ZTE, M-ICT 2.0 is designed to help businesses "seize opportunities" in an economy defined by the emergence of the sharing economy, the vast use of peer-to-peer networks, and dependence on the pervasive range of cloud computing platforms and services.

"M-ICT 2.0 identifies five key trends: Virtuality, Openness, Intelligence, Cloudification, and the Internet of Everything," the company said. "Encapsulated into the acronym VOICE, ZTE will focus on the individual and interconnected impacts of each trend as they develop products and services."

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