ZTE to improve handset profit margins this year

Telecom Lead Asia: ZTE, a telecom equipment maker in
China, is expecting to improve handset profit margins this year.

The telecom gear maker said global sales of its
smartphones to more than double from 15 million sold in 2011.

ZTE is the world’s No.4 handset maker. It started
focusing more on mobile phone business since growth in telecom equipment
business started slowing down.

“As handsets contribute more to overall revenue, it
will affect our profit margins. In 2012, our aim is to increase handset
margins. Going forward, we would like to stick with the number of models we
have and keep upgrading them,” said ZTE Executive Director He Shiyou.

The company forecast its global tablet PC sales to double
this year.

ZTE plans to focus on its star handphone models such as
the Blade and Skate and continue upgrading them rather than unveil additional
new models.

ZTE posted a drop in October-December 2011 net profit to
991 million yuan ($157 million), down 48 percent from 1.89 billion yuan a year
earlier. It reported operating revenue of 86.25 billion yuan ($13.7 billion)
for 2011.

ZTE faced trouble breaking into the U.S. market for
telecom equipment sales as the U.S. government has reservations related to
cyber security issues, although handset sales have been fairly strong,
according to a report in Bloomberg.

ZTE has expanded into emerging markets and Europe,
although the company said last month that it was scaling back operations in
Iran because of sanctions over the country’s nuclear-development program.

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