BDA - Opportunity through Insight

Huawei & ZTE: Adopting Different Strategies for the Future of their Handset Businesses

Nov 03 2008
Chinese equipment vendors Huawei and ZTE have seen rapidly growing global handset sales in recent years, mainly through customization for operators. ZTE and Huawei sold 30 million and 20 million unit handsets respectively in 2007. But they still lagged far behind the top five global handset makers and their influence mainly concentrated in emerging market. ZTE has set itself the ambitious target of shipping 100 million units by 2010 and attaining third place in the global rankings by 2012. BDA thinks that an expanding share in China's CDMA and 3G handset markets, rapidly growing sales in emerging markets, and further breakthroughs in developed markets will help ZTE to hit the target figure. Huawei attaches less importance to handset business than ZTE does. Huawei planned to sell a stake in its terminal division to private equity firms but shelved the plan this October, blaming the global financial crisis. BDA thinks Huawei will revive the plan once the economic environment improves and it will be hard for Huawei handsets to maintain the rapid pace of growth if the division is spun off, due to loss of the synergy with the company's other businesses.

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Huawei & ZTE: Adopting Different Strategies for the Future of their Handset Businesses

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