It looks like the rest of the world is catching up with our prediction that the next tech monolith will be ZTE.
Reuters ran a yarn saying that ZTE wants to be shipping 100 million smartphones a year by 2015.
The company sold 15 million smartphones last year and could sell up to 50 million this year – and will launch its first two phone-cum-tablet ‘phablets’ this year.
In emerging markets and Europe the company is valued at $9.3 billion. It has also suffered a bit because of sanctions over Tehran’s nuclear development program have resulted in it having to scale back in that country.
Research outfits Gartner and Credit Suisse have forecast ZTE sales will top 1 billion by 2014 thanks to its Blade and Skate models.
It has managed to do that without really needing to unveil new models and just upgrading the old ones.
Executive director He Shiyou said this morning that handsets contribute more to overall revenue, it will affect his company’s profit margins. As a result the gross profit margin at ZTE’s consumer gadgets division, which comprises mainly of handset sales, was 15.18 percent in 2011, down 3.81 percentage points from a year earlier.
He wants to increase handset margins. He did not say how. It does not look like it can reduce the cost of raw materials so ZTE will have to raise its average selling prices – and to do so will largely depend on sales in North America and Japan.
Lv Qianhao, head of handset strategy at ZTE, said it would come up with a Galaxy Note-type product which is a combo of handsets and tablets.
Others are not sure that the company can pull this off. Those who buy Apple and Samsung gear are not likely to take chances with a little-known brand from China, although domestically it is very successful, and the company is pursuing aggressive brand and marketing strategies.