ZTE

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ZTE Corporation
中兴通讯股份有限公司
Type Public company
Traded as SZSE: 000063, SEHK0763
Industry Telecommunications equipment
Founded 1985
Founder(s) Hou Weigui
Headquarters Shenzhen, Guangdong, China
Key people Hou Weigui (Chairman)
Shi Lirong (President)1
Products Mobile phones, hardware, software and services to telecommunications service providers and enterprises
Revenue CN¥ 86,254.5 million (2011)1
Operating income CN¥ 429.5 million (2011)1
Net income CN¥ 1,067.2 million (2011)1
Total assets CN¥ 105,368.1 million (2011)1
Employees 89,786 (2011)1
Website zte.com.cn ztedevices.com
ZTE
Simplified Chinese 中兴通讯股份有限公司
Traditional Chinese 中興通訊股份有限公司
Literal meaning China Prosperity Communications Corporation

ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation) is a Chinese multinational telecommunications equipment and systems company headquartered in Shenzhen, China. It is the world's fourth-largest mobile phone manufacturer measured by 2012 unit sales2 and the world's fifth-largest telecoms equipment maker measured by 2012 revenues (after Ericsson, Huawei, Samsung, and Nokia Siemens Networks).3 Mr. Hou Weiguo, the Chairman of ZTE corporation, founded Zhongxing Semiconductor Co. Ltd in 1985,4 and it changed into ZTE corporation in 19975 after a decade of development.

ZTE's core products are wireless, exchange, access, optical transmission and data telecommunications gear; mobile phones;67 and telecommunications software.8 It also offers products that provide value-added services,9 such as video on demand and streaming media.10 ZTE primarily sells products under its own name but it is also an OEM.11

With the evolution of mobile industry, ZTE has grown significantly in its handset business and ranked No. 4 for both mobile phone and smartphone domains as of Q2 2013.12 And ZTE won the 5th place in U.S. smartphone market.13

History

ZTE, initially founded as Zhongxing Semiconductor Co., Ltd in Shenzhen, China, in 1985, was incorporated by a group of investors associated with China's Ministry of Aerospace.14 In March 1993, Zhongxing Semiconductor has changed its name into Zhongxing New Telecommnication Equipment Co., Ltd with a capital of RMB 3 million, and created a new business model as named "state-owned and private-operating" economic entity. Ties to the state notwithstanding, the corporation has evolved into ZTE Corporation of being publicly traded having made an initial public offering (IPO) on the Shenzhen stock exchange in 1997 and another on the Hong Kong stock exchange in December, 2004.14

While the company initially profited from domestic sales,15 it vowed to use money from its 2004 Hong Kong IPO to further expand R&D, overseas sales to developed nations, and overseas production.16 Making headway in the international telecom market in 2006, it took 40% of new global orders for CDMA networks17 topping the world CDMA equipment market by number of shipments.18 That same year also saw ZTE find a customer in the Canadian Telus19 and membership in the Wi-Fi Alliance.20 More customers in developed nations soon followed Telus' lead, and in 2007 ZTE had sold to UK's Vodafone, Spain's Telefonica, and the Australian Telstra,19 as well as garnering the greatest number of CDMA contracts globally.21 By 2008 ZTE would be able to claim its customer base was truly global, as it had made sales in 140 countries.19

In 2009, the company had become the worldwide third-largest vendor of GSM telecom equipment, and about 20% of all GSM gear sold throughout the world that year was ZTE branded.22 As of 2011 it holds around 7% of the key 3GPP Long Term Evolution patents23 and that same year launched the world's first smartphone with dual GPS/GLONASS navigation, MTS 945. ZTE claims to devote 10% of its annual revenue on research and development each year, and it may be producing patents and utility licenses at a furious pace.2425 ZTE has filed 48,000 patents globally, and with more than 13,000 patents granted. 90% more patents are invention-related. In two consecutive years (2011 and 2012), ZTE has maximum number of patent applications globally,26 which is the first for a Chinese company.27

Subsidiaries

The ZTE Tower in Shenzhen

ZTE has several international subsidiaries.

ZTE (Australia) Pty Ltd

ZTE entered the Australian market in 2005,28 and as of 2009 ZTE (Australia) Pty Ltd29 acts as the exclusive supplier of ZTE handsets, network cards, and other products to customers, such as Telstra, in Australia.

ZTE Deutschland GmbH

ZTE Deutschland GmbH was founded in 2005 with headquarters in Düsseldorf; it, as of 2008, had hired 50 people, 60% of whom were recruited locally.30

ZTE USA Inc

A North American subsidiary of ZTE,31 with headquarters in Richardson, Texas,32 ZTE USA Inc offers wireless handset and networking solutions in the US. ZTE USA partners with NBA's Houston Rockets for the season of 2013-201431

ZTE (HK) Ltd

ZTE (Hong Kong) Ltd. (China) serves in such areas as global contract manufacturing.

ZTE do Brasil Ltda.

ZTE do Brasil Ltda. was founded in 2002 with headquarters in São Paulo and offices in Rio de Janeiro and Brasília; providing mobile devices and network solutions for the Brazilian market.

ZTE Pakistan Pvt Ltd

ZTE33 was introduced in the Pakistani market in 1999 with its headquarters in Islamabad and major offices in Lahore and Karachi. Providing Telecom Equipment, Network Solutions and Managed Services to telecom operators in Pakistan i.e. PTCL, Telenor, ZONG

Products

A ZTE Blade phone

Products can be roughly arranged into three categories: equipment used by network operators (links and nodes, etc.), equipment used to access networks (terminals), and services, which includes software.34 On October 2010, ZTE's unified encryption module received U.S./Canada FIPS140-2 security certification,35 which made ZTE the first vendor from P.R. China to successfully validate modules according to the NIST FIPS140-2 standard under the CMVP program.36

Consumer electronics

Mobile phones

As of 2012, ZTE is the 4th largest mobile phone vendor.37 It also placed within IDC's Top 5 smartphone vendor leaderboard.3839 Strategy Analytics counts ZTE as 4th largest smartphone vendor (5% market share) in 2Q2013.40 It also manufactures tablets.414243

Mobile Hotspots

The MF60 and MF80 4G mobile hotspots were announced in August 2011.44

Windows Phone

At Mobile World Congress 2014 in Spain, Microsoft announced that ZTE is the latest hardware partner of Windows Phone platform.45

Customers

ZTE booth at Mobile World Congress 2013 in Barcelona

A good number of ZTE's customers are outside of China. During the 2000s, the majority were developing country mobile network operators, but ZTE products see use in developed countries as well. The UK's Vodafone, Canadian Telus, Australia's Telstra, as well as France Telecom have all purchased equipment from ZTE.46

Many Chinese companies are also ZTE customers, including China Netcom,47 China Mobile,48 China Satcom,49 China Telecom,50 and China Unicom.9

In the United States, ZTE USA manufactures mobile phones and broadband devices for multiple wireless carriers including Aio Wireless, AT&T, Boost Mobile, Cricket, MetroPCS, Sprint, T-Mobile, TracFone, Verizon, and Virgin Mobile. It may also sell network equipment to these carriers.

Controversies

Bribes for contracts

Norway

Norwegian telecommunications giant Telenor, one of the world’s largest mobile operators, banned ZTE from "participating in tenders and new business opportunities because of an alleged breach of its code of conduct in a procurement proceeding” during a five month time span ending in March, 2009.51

Philippines

Contract negotiations to build a broadband network for the Philippine government may have included improper activities.52 The project was later canceled.52

Surveillance system sale

In December 2010, ZTE sold systems for eavesdropping on phone and Internet communications to the government-controlled Telecommunication Company of Iran.53 This system may help Iran monitor and track political dissidents.

Handset security

At least one ZTE mobile phone (sold as the ZTE Score in the United States by Cricket and MetroPCS) can be remotely accessed by anyone with an easily-obtained password.37

In 2012, politicians in the United States of America raised other security concerns regarding ZTE and another Chinese wireless equipment manufacturer, Huawei.54

References

  1. ^ a b c d e f "Annual Report 2011". ZTE Corporation. Retrieved 26 April 2012. 
  2. ^ Lam, Wayne (18 December 2012). "Samsung Displaces Nokia as Top Cellphone Brand in 2012 and Takes Decisive Smartphone Lead Over Apple". iSuppli. Retrieved 12 June 2013. 
  3. ^ 2012 Annual Report from ZTE Corporation http://wwwen.zte.com.cn/en/about/investor_relations/circular/201304/P020130414674755060043.pdf
  4. ^ Introduction of ZTE's history on ZTE.COM.CN h http://wwwen.zte.com.cn/en/about/corporate_information/history/
  5. ^ Introduction of ZTE's development stages http://www.zte.com.cn/Events/20years/history1.htm
  6. ^ ZTE to Develop 3G Mobiles For Telefonica SDA Asia Magazine, February 26. 2007
  7. ^ ZTE D90. Telus. 2007
  8. ^ Product Portfolio ZTE Official Site
  9. ^ a b ZTE Secures More than Half of China Unicom GSM Value-Added Service System 2008 Tender ZTE Official Site, 2008-12-15
  10. ^ ZTE Corp's Company Description Businessweek.com
  11. ^ UPDATE 3-LSI sees second half better than first reuters.com, Wed Jan 26, 2011 9:14pm EST
  12. ^ CNBC: ZTE wins 5% of Global Smartphone Market http://www.cnbc.com/id/100930925
  13. ^ Bargain-bin smartphones vault ZTE into the top 5 in U.S. market share http://bgr.com/2013/05/03/zte-american-smartphone-market-share-analysis/
  14. ^ a b 20 Years History of ZTE Corporation by Mr. Huang Guo in 2005 h http://wwwen.zte.com.cn/endata/magazine/ztecommunications/2005year/no2/articles/200506/t20050622_162340.html
  15. ^ UPDATE 1-ZTE says 2010 net profit up 32 pct on better sales reuters.com, Thu Jan 27, 2011 6:33am EST
  16. ^ A Global Telecom Titan Called...ZTE? Businessweek.com, March 7, 2005
  17. ^ China-based Huawei and Murali make headway in global telecom market DigiTimes.com. March 9, 2007
  18. ^ ZTE tops 2006 international CDMA market. CIOL Bureau. March 8, 2007
  19. ^ a b c History ZTE Official Site
  20. ^ ZTE joins Wi-Fi Alliance----- one of the first Chinese members ZTE Official Site, 2006-08-30
  21. ^ ZTE Tops 2007 Global CDMA Market ZTE Official Site, 2008-01-30
  22. ^ INTERVIEW-China's ZTE aims for fifth of global GSM gear market reuters.com, Tue Nov 17, 2009 10:53pm EST
  23. ^ China's ZTE targets 10 pct of LTE patents reuters.com, Tue Jan 11, 2011 11:07am EST
  24. ^ "ZTE Ranked World No. 1 in Patent Applications for Second Straight Year". http://www.cnbc.com. CNBC. Retrieved 20 March 2013. 
  25. ^ Strong Growth in Demand for Intellectual Property Rights in 2012 http://www.wipo.int/pressroom/en/articles/2013/article_0006.html
  26. ^ WIPO declared ZTE as No.1 patent application in 2012, and in 2011. http://www.wipo.int/pressroom/en/articles/2013/article_0006.html http://www.wipo.int/pressroom/en/articles/2012/article_0001.html
  27. ^ Yahoo reported ZTE as first Chinese company to rank No.1 in global patent applications. http://finance.yahoo.com/news/zte-ranked-world-no-1-020900609.html
  28. ^ About ZTE ZTE Australia Official Site
  29. ^ Global Sales Offices > Asia Pacific ZTE Official Site
  30. ^ ZTE opens new office in Bonn, Germany ZTE Official Site, 2008-11-18
  31. ^ a b Pocket Communications Launches ZTE's Tri-Band C79 and C78 ZTE Official Site,2009-04-02
  32. ^ ZTE Opens LTE Laboratory in North America ZTE Official Site, 2009-10-20
  33. ^ [1] ZTE Pakistan Official Site
  34. ^ "ZTE Corp (ZTCOF.PK): Overview; Full description". Thompson Reuters. Retrieved 2012-05-13. 
  35. ^ NIST website for security certifications http://csrc.nist.gov/groups/STM/cmvp/documents/140-1/140sp/140sp1586.pdf http://csrc.nist.gov/groups/STM/cmvp/documents/140-1/140sp/140sp1589.pdf
  36. ^ ATSEC participated in ZTE products security evaluations http://www.atsec.com/us/news-zte-products-receive-fips-140-2-certification-from-cmvp-241.html
  37. ^ a b Jeremy Wagstaff; Lee Chyen Yee (May 18, 2012). "ZTE confirms security hole in U.S. phone". reuters.com (Thompson Reuters). Retrieved 2012-05-20. 
  38. ^ IDC: Samsung extends lead over Apple while Chinese vendors increase influence http://www.engadget.com/2013/01/25/idc-samsung-extends-lead-over-apple-q4-2012-smartphones/
  39. ^ IDC: Growth Accelerates in the Worldwide Mobile Phone and Smartphone Markets in the second Quarter, 2013 http://www.idc.com/getdoc.jsp?containerId=prUS24239313
  40. ^ Strategy Analytics: Global Smartphone shipments Hit Record 230 Million Units in Q2 2013 http://blogs.strategyanalytics.com/WSS/post/2013/07/26/Strategy-Analytics-Global-Smartphone-Shipments-Hit-Record-230-Million-Units-in-Q2-2013.aspx
  41. ^ ZTE Launches Two Android Tablets: Dual-core Z-pad and Android 3.0 V11 at MWC
  42. ^ ZTE V9 Android tablet revealed androidcommunity.com, 12 October 2010
  43. ^ V9 product page ZTE Official Site
  44. ^ [2]dead link
  45. ^ "Microsoft Announces ZTE As New Windows Phone Hardware Partner". 
  46. ^ For Vodafone and France Telecom sales, see ZTE Wins China Mobile WAP Expansion Contract ZTE Official Site, 20071016
  47. ^ China Netcom´s first IPTV agreement confirms ZTE as major international IPTV network provider ZTE Official Site, 20060830
  48. ^ ZTE to Install the World´s Largest Optical Transmission Network ZTE Official Site, 20060830
  49. ^ ZTE and China Satcom to provide GoTa network for China´s 10th National Games ZTE Official Site, 20060830
  50. ^ ZTE Bags Major Value Added Services Contracts in China ZTE Official Site, 2006/11/14
  51. ^ Norway's telco giant bans ZTE for 6 months abs-cbnnews.com, 10/21/2008
  52. ^ a b Arroyo suspends telecoms deal with Chinese firm reuters.com, Sep 22, 2007
  53. ^ Steve Stecklow (22 March 2012). "Special Report: Chinese firm helps Iran spy on citizens". Reuters. Retrieved 23 March 2012. 
  54. ^ U.S. panel cites risks in Chinese Equipment October 9, 2012

External links


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