ZTE profits doubled in 2014, eyes third place in the US

The rise of China’s home-grown smartphone brands continues. ZTE has just announced a 94 percent increase in its net profit in 2014, led by strong smartphone sales and growth in China’s 4G carrier networks.

Profits reached 2.63 billion yuan ($423.4 million) in 2014, up from 1.36 billion in the previous year, while operating revenue rose 8.3 percent to 81.4 billion yuan. Strong demand for low-cost handsets have helped to drive ZTE’s bottom line, the company is riding the same wave that has seen Xiaomi, HUAWEI, Meizu and other low-cost Chinese manufacturers rise to prominence in Asia’s booming smartphone industry.

Like others, ZTE has its sights set on further overseas expansion this year. To do so, ZTE has increased its marketing expenses by 50 percent in 2015 and, unlike most of its rivals, is directly targeting the US market next. The company aims to make it into the top three smartphone vendors in the US by 2017. ZTE currently sits in fourth position in the North American market, behind Apple, LG and Samsung, and the company saw its smartphone shipments jump by 50 percent in the US last year, so the goal may not be as out of reach as some may think.

In addition to smartphone growth, ZTE is also benefiting from the adoption of faster 4G data speeds throughout China. A separate arm of company supplies telecommunication equipment for networks and the division is expected to build a further half a million 4G base stations around China in 2015, according to Phillip Capital.

2015 is likely to be another bumper year for China’s smartphone manufacturers, with competition only likely to increase as companies look to expand into overseas markets.