Will ZTE Crush Apple and Samsung in 4G?

Chinese mobile manufacturer ZTE wants to come out on top in the 4G market against competitors like Samsung and Apple.

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By Kiran Moodley

zteusa.com

This story originally appeared on CNBC

Chinese handset manufacturer ZTE has launched an all-out attack on the Apple and Samsung-dominated smartphone market, arguing that while those two brands have dominated the 3G world, ZTE will win 4G and remain a key player.

4G service allows faster high-speed mobile internet connection, which is crucial for a generation of smartphone users increasingly using their handsets to watch videos. It has now become a key area of competition as handset manufacturers fight to attract new customers and consumers shift from 3G to4G.

One of the top five global smartphone manufacturers, ZTE unveiled its Grand Memo II LTE ultra-slim phone at the Mobile World Congress in Barcelona in an attempt to enter the higher end of the market. It also launched two new Firefox phones - the Open C and Open II - to stabilize its strong presence at the cheaper end.

While a price for the Memo II has not been announced, Lv Qian Hao, head of device strategy at ZTE, told CNBC that the company wants to focus on the $200-$400 mainstream range.

"In 1G technology, Motorola was number one," Lv said. "For 2G mobile device, Nokia was number one. For 3G, Apple and Samsung are number one. For 4G mobile and wearable device, ZTE has the strong confidence to be the success. It is a precious chance. It will make ZTE more successful than ever."

Lv said that ZTE had the patents to lead the smartphone charge. The World Intellectual Property Organization (WIPO) ranked ZTE first in international patent applications in 2012, for the second year running. According to WIPO's data, ZTE filed applications for 3,906 patents under the Patent Cooperation Treaty (PCT) in 2012, 37 percent more than 2011, making it the first company from China to top the tables for two consecutive years.

This rich patent source, Lv argued, allowed the Chinese handset maker to produce phones such as the Memo II, which will have a batter life four hours longer than its rivals, as well as a high quality photography and unique split screen technology.

"This means you can split your screen and put on app on the left side and one app on the right," he explained. "You can watch football or the NBA on one side and one the other you can share your feelings on the game on Facebook or Twitter."

The Memo II also memorizes user habits, offering an interface customized to needs of each consumer. Lv said he wanted to "beat" Samsung, and that ZTE's key advantage was that because it was a total communications corporation, "it will have a deeper and better understanding of the future revolution of communication architecture, and it will let ZTE handsets come out quicker and more powerful than other handsets."

Last year, Apple had 32.9 percent of the U.S. smartphone market share in the third quarter and Samsung had 32.6 percent, according to market-research firm Strategy Analytics. ZTE was in the number four spot at 5.8 percent. Worldwide, ZTE is at number eight.

ZTE has attempted to keep up with Samsung, having already released a smartwatch ahead of Apple doing so and Lv said the company was planning to also introduce smartglasses and smartphone-connected shoes by the end of the year hopefully.

Commenting on ZTE's announcements, CCS Insight wrote in a note: "ZTE continues to improve on the design, materials and finish of its products to compete with an abundance of sharply priced Android contenders.

"Nonetheless, differentiation is getting increasingly difficult in a hopelessly crowded market, meaning ZTE is likely to resort to price to find clear air for its LTE phablet."

With the Firefox models, the ZTE Open C will be launched with Telefonica in Venezuela and Uruguay during the second quarter of 2014, while the Open II will build on the original Open model, which was introduced in 2013 in six countries as well being sold through eBay in the U.S. and U.K.

Lv concluded that with 4G, ZTE will be ahead of the competition, and when it comes to 5G, they have been researching the technology for three years. "We will take advantage over our competitors."

Kiran Moodley
Kiran Moodley is an Assistant Producer for CNBC in London. Previously, he worked for PBS NewsHour in Washington, D.C., and British GQ in London. He has also written for The Daily Beast, The Atlantic and The New Statesman. He holds a BA in History from Clare College, Cambridge, and a MS in Journalism from the Columbia University Graduate School of Journalism.

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