ZTE currently enjoys a strong position at the low end of the mobile phone market in New Zealand and the problems caused by US sanctions could create an opportunity for other vendors to take that market, says IDC.
The US Government has determined that ZTE violated terms of sanctions and has banned the company from procuring American componentry, such as Qualcomm semiconductors, essential to the manufacturing of their phones.
Alex Yuen, client devices analyst, IDC New Zealand said: “Over the past five years, ZTE has experienced solid growth, growing from 2.5 percent market share in 2014 to 9.4 percent in 2017. As of 2018Q1 (January to March), ZTE accounts for eight percent of shipments within the New Zealand mobile devices market. As these shipments are suspended, it presents an opportunity to other players in the mobile device market.”
Yuen said ZTE’s primarily focus was the lower price-band market. “All ZTE models currently in market are below $300, with 70 percent of their shipments being priced between $50 and $100.”
According to Yuen, over the past five quarters telcos have been particularly successful at using low-end mobile devices to lure potential customers onto their network.
“Vodafone, in particular has been particularly successful in this space, driven by discounting their own-branded mobile devices in the below $100 space, a large portion of which are manufactured by ZTE”.
Yuen suggested ZTE’s market share was “there to be won” and flagged Alcatel as one provider in prime position to take advantage.
“They already manufacture low-cost Vodafone branded mobile devices for Vodafone, and retail Alcatel-branded phones at Spark.”
He added: “French-owned MobiWire may also well positioned to take on the extra demand from telcos. It manufactures low priced feature phone models such as the Hakan and Sakari, with the Kosumi smartphone model recently released by 2degrees having comparable specs to its ZTE equivalent.”