ZTE to launch Android-based smartphone in 2010

ZTE Corp. plans to launch a new smartphone based on Google Inc.'s mobile operating system next year and is in talks with carriers such as Vodafone Group PLC, Verizon Wireless, France Telecom SA's Orange and T-Mobile to supply smartphones, an executive said Wednesday.

The move reflects the Chinese equipment maker's ambitions to enter the fastest growing segment of the mobile phone industry. Smartphones are devices that allow consumers to send e-mails and conduct other multi-media applications.

Traditionally, ZTE has been known to supply low-cost telecom equipment such as base stations to companies such as China Mobile Ltd. but it is also keen on beefing up its devices business.

"We hope to sell our smartphone to these operators next year," Dale Ying, ZTE's managing director of handset business marketing, told Dow Jones Newswires in an interview on the sidelines of the GSMA Mobile Asia Congress in Hong Kong.

"We see big potential in the smartphone market. We are targeting to ship more smartphones in the coming few years which will help to improve our gross margin."

The company currently makes handsets for U.K.-based Vodafone, Spain's Telefonica SA, and China Mobile.

Ying also said ZTE is in discussions and conducting testing with operators in North America comprising Deutsche Telekom's T-Mobile USA, AT&T Inc., Sprint Nextel Corp., and Verizon Wireless, a joint venture between Verizon Communications Inc., to sell handsets and mobile broadband data cards.

He said ZTE targets shipping a combined 60 million handsets and mobile broadband data cards this year, up from 45 million units in 2008.