ZTE to launch high-end smartphones in the U.S. next year

IDG News Service - ZTE plans to launch high-end smartphones in the U.S. next year, according to a company spokeswoman, breaking out of its mold as primarily a player in the low-end phone market.

The Chinese handset maker is currently the world's fourth largest handset vendor by sales, with year-over-year growth in the third quarter at 58 percent, according to research firm IDC. But it has largely specialized in producing lower-end mobile handsets, including basic feature phones.

The company, however, has big ambitions to boost its smartphone sales, and said in November that it will invest more in marketing to improve its brand recognition.

The ZTE spokeswoman declined to reveal release dates or prices for its high-end phones on Friday, but said the company would also release a 4G LTE mobile device next year, without specifying whether it would be a smartphone or a tablet.

In September, ZTE began selling its first smartphone in the U.S. through Cricket, a mobile carrier that offers monthly plans without contracts. The smartphone, called the ZTE Score, uses Android 2.3 and features a 3.5-inch touchscreen. It sells for a suggested retail price of US$70, after discounts offered by Cricket.

A month later, ZTE launched its first Android smartphone for AT&T's network. The handset, called the AT&T Avail, was launched as prepaid phone on the carrier, and is priced at $130.

But in the third quarter of this year, ZTE had a mere 0.2 percent share of the U.S. smartphone market, according to research firm Gartner.

In order to compete in the U.S., ZTE will have to come out with a flagship device which is able to compete with the likes of Apple's iPhone 4S and Samsung's Galaxy S II, said Daryl Chiam, an analyst with research firm Canalys. ZTE will also have to offer the device through a top-tier operator such as AT&T or Verizon, which can both provide subsidies and help market it, he added.

China is on the verge of becoming the world's largest smartphone market by shipments, but in terms of smartphone revenue, the U.S. is still the top market, according to research firms. At the same time, consumer interest in low-end feature phones is gradually declining, and sales of smartphones will grow worldwide, Chiam said.

"It's going to be important for vendors to focus on their smartphone portfolios," he said. "They will have to come out with a broad range portfolio, not just high-end, but mid-tier and low-end as well."