ZTE booms as competitors wilt

Posted By TelecomTV One , 27 October 2009 | Tags: growth China ZTE

The global end-of-recession results are showing sharp differences in the way different companies are emerging. Some sluggishly, some like trains out of a tunnel. Ian Scales reports.

Apple, for instance, has famously announced its best ever results for the quarter ending in September: computer unit sales up 17 per cent; iPhone sales up 7 per cent. Only its iPod sales had slipped.

That's impressive but looks a tad languid when set beside the performance put in by Chinese telecoms equipment behemoth ZTE. It has enjoyed a third quarter headline growth rate of 43 per cent over the same quarter last year. In raw money, that represents US$6.2 billion.

The carrier network side of ZTE reported 47.32 per cent growth from 3G equipment as well as optical transmission and data communications products. But growth wasn't soggy on the phone side either. 'Terminal products' grew by a hefty 38.67 per cent. Meanwhile software and services also grew by a 18 per cent.

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Yes, ZTE is advantaged by its huge domestic market's move to 3G. But that's an opportunity for it to use its scale and volume to its advantage as it pushes into international markets. As it says itself, it will use its cost advantage, financing resources and customisation abilities to do just that.

A plethora of recent ZTE moves include the opening of testing facilities in the US and a successful phone manufacturing exercise in Portugal where it has launched low-cost Windows Mobile smartphones for Portuguese operator TMN and managed to capture 30 per cent of the Portuguese smartphone market in the process. It says it wants to keep up this approach to market entry in other parts of Europe.

European and North American telecoms equipment vendors (those remaining), some of whom have been struggling through the recession had better watch out.

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