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ZTE to release 'Galaxy Note-type product' this year, shift business model

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ZTE hints at Galaxy Note competitor while shifting its business model towards one reminiscent of HTC's.

Gallery Photo: ZTE T98 and PF 100 Android tablet hands-on
Gallery Photo: ZTE T98 and PF 100 Android tablet hands-on

Looks like ZTE wants its enter the phone-or-tablet debate head first. According to Head of Handset Strategy Lv Qianhao, the company expects to release a "Galaxy Note-type product" before the end of the year. The company is hoping that there is still room to grow in the somewhat nebulous area between phones and tablets, and the "phablet" form factor could be just the inroad ZTE needs to create a high end product in a space not already saturated by the big names. ZTE anticipates that it will sell up to 50 million smartphones this year, an increase of more than three times the number of sales it made in 2011 of 15 million units. Considering the success Samsung has seen with the Galaxy Note, it is hardly surprising that ZTE is looking to ride the wave.

There has been a big push by both ZTE and Huawei — two of the largest Chinese phone manufacturers — to establish brand loyalty and gain the trust of North American consumers. ZTE has decided to emulate HTC's recent move away from frequent, iterative product updates (i.e. One X, One S) and instead intends to focus on refining its Blade and Skate series of handsets. It stands to reason that slowing down product release gives consumers a chance to familiarize themselves with product and, in turn, a brand. ZTE also knows that turning a profit on low to mid-range devices requires significant volume, but the sheer litany of devices available from Huawei, HTC, Samsung, and even Apple represents a substantial barrier to entry.