ZTE, the fifth-largest seller of handsets worldwide, is changing its business strategy to improve brand recognition and compete more effectively in European markets.
According to He Shiyou, ZTE's head of mobile phones, the Chinese manufacturer will begin selling more smartphones directly to European retailers. In an interview, He commented:
"Right now, it’s the operators in Europe who choose our brand. In the coming three years, we’ll make a transition from focusing on operators to focusing on the open market."
ZTE, although a major brand in its home country, wants to increase the number of smartphones sold through non-carrier partners worldwide. He says that 10 percent of the company's handsets are currently shipped in this manner, but the mobile phone head wants to see this increased to 40 percent over the next few years.
Most ZTE handsets are sold by carriers on a subscription basis. According to Bloomberg, the brand is less recognizable in European markets than products launched by rivals including Apple and Samsung, but the Shenzhen-based company is willing to double its marketing budget this fiscal year in order to boost revenue and open new sales channels.
According to research firm IDC, ZTE is the fifth-largest handset manufacturer in the world. The company has a strong following in Asia Pacific and North America, but a small presence in the EMEA region. ZTE claimed 4.2 percent of the smartphone market in Q1 2013, shipping 9.1 million handsets, an increase of 49.2 percent year-on-year.
Samsung, in comparison, secured 32.7 percent of the market in Q1 2013. If ZTE is serious about trying to take on larger handset makers, then the company has to improve brand awareness if smartphone growth outside of the Chinese market is viable.
Next month, ZTE will launch its first smartphone based on Mozilla's Firefox operating system.