ZTE Chips Away at U.S. Smartphone Market
Chinese handset maker connects with consumers as American shipments increase
By Carolyn Cui
Aug. 17, 2017 7:00 a.m. ETChinese smartphone maker ZTE Corp. ZTCOY 1.89% has nudged up its market share in the U.S., as its affordable devices and aggressive marketing chip away at the market’s leaders.
ZTE’s U.S. smartphone shipments increased 36% during the second quarter to 4.8 million units, according to Counterpoint Technology, a market research firm.
ZTE had 11.5% of the U.S. market, up from 10.1% in the first quarter. It was the fourth largest seller behind Samsung Electronics Co. and Apple Inc., which each took about 30% of the market, and LG Electronics Inc., which accounted for 15.4% of the market, Counterpoint said.
Both Apple and Samsung are poised to launch new flagship devices in the U.S. in coming months.
“The U.S. is the most competitive market, but we believe if we can manage the challenge well, it will drive the overall competitiveness of our company,” said Lixin Cheng, chief executive of ZTE’s mobile devices, who was until recently the head of its U.S. operations.
Mr. Cheng said the Chinese company now faces a game of catch-up on its home field. ZTE’s share in China, the world’s largest smartphone market, was at 7.8% for the first quarter, far behind its longtime rival Huawei Technologies Co.’s 24.7%, according to TrendForce.
Huawei, which had largely retreated from the U.S. market due to security concerns, is also considering a comeback. In 2015, the company’s deputy chairman, Ken Hu, said, “We have already seized a leading position in the Chinese [smartphone] market. We hope that in the U.S. we can achieve the same success.”
While ZTE entered the U.S. market more than a decade ago, the company was largely unknown to American consumers until recent years as it started making devices under other brands, especially those of carriers.
In a move to crack into the high-end market, ZTE launched a flagship phone in the U.S. in 2015, the Axon, and has started a massive sports marketing push with several National Basketball Association teams.
Some analysts say ZTE needs to build more rapport with U.S. carriers. About 75% of the mobile devices in the U.S. are sold through carriers, but ZTE’s Axon is still largely sold through open channels such as Best Buy Co. and Amazon.com Inc.
Without the support of carriers, it remains a challenge for ZTE to break into the top three, said Anthony Scarsella, a research manager at IDC.
Write to Carolyn Cui at carolyn.cui@wsj.com
