He Shiyou, board member and GM of mobile systems at Chinese telecom equipment and terminal manufacturer ZTE (0763.HK; 000063.SZ), recently announced that in 2012, ZTE intends to focus on increasing profits generated by its handset business. As handset sales constitute a major percentage of the company's total revenues, the increase will noticeably impact ZTE's overall profit margin. In the future, the company plans to put more emphasis on handset design for its mid-range and high-end models, with particular focus on its high-end flagship models, in an effort to enhance ZTE's brand reputation globally. The company hopes to reverse declining margins of its handset business, and expects both to double its global smartphone sales to 30 mln units this year and to bring shipments up to 100 mln units by 2015. Last year, ZTE's global smartphone shipments reached 15 mln units, up 27% from 2010. The push for more than 100% growth in shipments this year will focus on high-end handsets in the retail price range of RMB 1,500 to RMB 2,500.

He Shiyou reported that ZTE plans to continually upgrade its handset models, such as its high-end "Blade" and "Skate" phones, as opposed to consistently rolling out all-new models. Additionally, in February of this year, ZTE partnered with Sprint Nextel on its first U.S. tablet PC, the Optik. The Optik tablet runs on an Android OS, and is sold at a non-contract price of USD 350. ZTE expects its global tablet PC sales to double this year.

According to He, ZTE also plans to bolster support for its B2C sales channels this year, increasing their proportion of the company's sales channels network to over 10%.

Source:marbridgeconsulting