ZTE said that it “exceeded the company’s target by more than doubling shipments of smartphones in 2012”, delivering improved profitability for its terminals business unit.
The company glossed over the fact that its 2012 results announcement recently showed that operating revenue in this unit fell 4.1 per cent to CNY25.84 billion, which was attributed to factors including weaker market demand for feature phones and data cards.
But the increased proportion of sales coming from more lucrative smartphones meant that its gross profit margin in this unit was 16.8 per cent, up 1.6 percentage points.
In a statement, the Chinese vendor did not actually state how many units it had shipped, although analyst firm IDC had it pegged as the world’s fourth-biggest mobile phone vendor in the fourth quarter of 2012, ahead of fast-growing rival Huawei.
Having built its position largely in the low-cost end of the device market, the company is looking to bolster its position in the “mid to high-end” smartphone line.
It said that 15 per cent of its smartphone revenue in 2012 was from such terminals, with the aim to grow this to 25 – 30 per cent this year.
He Shiyou, EVP and head of the Mobile Device Division at ZTE, said: “For ZTE’s terminals business, 2012 was a year of transition that brought increased scale, profitability, and a higher profile. The shift to higher value will continue in 2013.”