ZTE has signed multi-year corporate sponsorship agreements with two additional US professional basketball teams in a continued effort to build brand awareness for its lineup of smartphones.
Madison Square Garden CEO Tad Smith yesterday announced that ZTE is the “official smartphone” of the Knicks (Madison Square Garden is the owner of the Knicks.)
Each year an estimated 600 million people pass by Madison Square Garden, which will give ZTE huge branding exposure, claimed ZTE USA CEO Cheng Lixin.
The Golden State Warriors (based in Oakland) made a similar announcement today, giving ZTE visibility in three regions across the US.
The announcements come a year after the Chinese vendor entered into a similar deal with the Houston Rockets for an undisclosed amount. That one-year agreement, which can be extended to three years, was the first of its kind for ZTE and is a major shift for the company that is well known among telecom operators but lacks brand recognition among consumers in most markets outside of China.
The deal with the Knicks gives ZTE access to LED signage inside and outside the venue, with a guaranteed number of minutes per home game. In addition, the company can run in-game promotions, such as ‘Getting you closer’ lucky draws for seat upgrades.
The company’s move to target consumers directly, instead of relying on operators to push its devices, came after it decided to move away from white-label sales, which last year accounted for half of shipments. Cheng said after June all releases in the US have the ZTE logo.
He told Mobile World Live that since the tie-up with the Rockets, its brand awareness has jumped from 1 per cent to 16 per cent – based on a survey done by ZTE USA.
According to Strategy Analytics, ZTE ranked fourth in handset sales in the US, with a 7.4 per cent market share in Q2. It trails Apple, Samsung and LG.
The Shenzhen-based company markets 56 devices in the US through operators. In the US 95 per cent of handsets are sold via operators’ retail shops and other channels such as big-box retailers Best Buy and Walmart. Just five per cent are sold in the ‘open’ market, with unlocked SIMs.
The company is now pushing direct to consumers with its Nubia lineup of premium smartphones, which has its own look and feel, and has been receiving fairly positive reviews for both design and usability. In late August it launched the Nubia 5S mini (LTE) for $280.
Cheng (pictured) said open market channels will include Amazon, the basketball teams’ retail outlets and websites (which by NBA requirements can only market their own branded merchandise) and its own US website.
He admitted the company isn’t capable of covering the entire US by itself and has been working with a third party for more than two years to boost distribution with big-box and other retailers. “We have also launched a social media platform to have a more efficient way to reach out to sales associates in stores and provide training.”
ZTE reported last week Q3 handsets sales increased 40 per cent from the same period in 2013 but were flat for the first nine months of the year.
In Q2 ZTE shipped 10.5 million smartphones for a 3.5 per cent share of the global market, according to a number of research firms. It announced back in January it aimed to take a 10 per cent share of the global smartphone market by 2017. Its global share has dropped from 5 per cent last year as it faces increased competition from Chinese rivals Xiaomi, Lenovo and Huawei, all of which have more than a five per cent share.