ZTE to Launch New Smart Phone in 2010

HONG KONG ZTE Corp. plans to launch a new smart phone 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 smart phones, an executive of the Chinese equipment maker said Wednesday.

The move reflects ZTE s ambitions to enter the fastest-growing segment of the mobile-phone industry. Smart phones allow consumers to send e-mails and conduct other multimedia applications. Traditionally, ZTE has been known to supply low-cost telecom equipment like base stations to companies such as China Mobile Ltd. However, it is also keen to beef up its devices business.

"We hope to sell our smart phone to these operators next year, said Dale Ying, ZTE s managing director of handset business marketing.

"We see big potential in the smart-phone market. We are targeting to ship more smart phones 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.

Mr. Ying also said ZTE is in talks and conducting testing with operators in North America comprising Deutsche Telekom AG s T-Mobile USA, AT&T Inc., Sprint Nextel Corp., and Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone, 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.

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