ZTE the totally underestimated Number Five handset maker

Rating: Nobody bothers to mention Symbian to ZTE
What grabbed the headlines as up-and-coming Chinese handset producer, ZTE, chatted cosily with the Press last week was the impending launch of two new Android handsets the Racer and the Blade. This news obscured the fact that developers could easily find themselves confronted with a Top Five handset player they know very little about.

There s no doubt that ZTE s terminal business (which includes mobile broadband dongles as well as handsets) has been expanding in leaps and bounds. In 2009, ZTE shipped 40 million handsets and some 70 per cent of those ended up in overseas markets.

Wu Sa, director of mobile device operations with ZTE UK, made it every clear that his company wants to break into the important North American and European markets and that the UK will be a staging post.

What remained unstated is that smartphones are critical to success in both the EU and the USA but ZTE is still an obscure supplier of such products.

This could well change as ZTE revealed that it intends to release eight new handset in what remains of 2010 and that with an impending deal with O2, it will be able to count all five UK mobile operators as clients.

Of those eight handsets, two will definitely be Android based. Wu Sa hinted that at least one of the other six would be based on Windows Phone not surprising given his company s close relationship with Microsoft.

The fact that no hack even mentioned Symbian to ZTE was extremely telling. It is reminiscent of the days when Novell had a huge installed base of network servers while the developer community had quietly switched its allegiance to Microsoft.

ZTE s sales model is a huge clue here too. It only supplies handsets if a mobile operator actually says it wants to buy such models. So it is very clear that no-one is clamouring for new Symbian handsets from anyone besides Nokia or, maybe, Sony Ericsson.

The list of handset OS s ZTE can supply is interesting since it encompasses Android, Windows Mobile, Linux, OMS and BMP. Crucially any handset form factor ZTE introduces will be able to run all of these.

On paper, ZTE is still aiming to be the Number Five handset supplier on a global basis. What Wu Sa revealed, however, is that the gap between the Number Four, Five and Six players is relatively small. The big gap is between the Number Three and Four slots.

Nokia has shown in the past that it can overcome unfavourable market trends. It saw off the threat from clamshell handsets by eventually producing enough fold-design [it couldn't bring itself to say clamshell] models to keep the operators quiet.

As Apple has ably demonstrated the way to domination in the smartphone sector is to encourage mobile app developers. ZTE can compete in the smartphone sector on price but what is it going to do about wooing software developers?

At present, this seems a bridge that ZTE will cross later.But Nokia must act fast if it is to avoid becoming the Novell of the handset sector.

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