ZTE to Launch High-End Smartphone in U.S.

ZTE Corp. plans to launch a high-end smartphone in the U.S. in the middle of next year, an executive said, marking a change from its low-cost emphasis

"By 2015, we expect the U.S. to be the largest market for handsets for ZTE," Lixin Cheng, president of the Chinese company's North American region, said in an interview Wednesday in Hong Kong.

Long known for making phones on a contract basis—in addition to telecom equipment—ZTE is shifting its focus to building its own brand of mobile devices, and is building market share: In the third quarter, it had 5% of the global handset market, pushing it past Apple to No. 4 by shipments, according to research firm Strategy Analytics.

"Next year, we're going to launch LTE and high-tier phones in the U.S.," Mr. Cheng said. LTE, for long-term evolution, is a fourth-generation wireless technology that allows faster download speeds than current 3G technology.

The company, which is listed in Shenzhen and Hong Kong, is in talks with the top four U.S. carriers about the phone, likely to be based on Google Inc.'s Android software or MicrosoftCorp.'s Windows 7 platform, said the executive.

"With a similar feature set [as the iPhone], ZTE can offer an alternative," said Mr. Cheng, adding that the phones would still be "more affordable" than the iPhone, though he declined to specify price points.

Though the U.S. economic slowdown and the crisis in Europe are weighing on consumer demand for gadgets, the executive said ZTE is upbeat about its growth prospects in North America. Its U.S. shipments of mobile devices in the third quarter were up 157% from a year earlier, he said.

The company, is also considering building a manufacturing facility to make mobile devices in the U.S., he said, where it now has 10 offices and three research and development facilities. ZTE has 400 employees across North America.

"We have increased substantially our employees and we're constantly adding staff" in areas such as local R&D, he said. ZTE's staff levels in the U.S. increased about 30% between 2010 and 2011.

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