Domestic industry reshuffle is imminent Zeng Xuzhong ushered in ZTE mobile phone for half a year exam

ZTE last week released its best half-year earnings in nearly a decade: total operating income to 37.697 billion yuan (RMB), an increase of 0.51% per cent, net profit of 1.128 billion yuan, growth of 263.92% per cent year-on-year, operating cash flow for the first time in a positive.

And in ZTE three business (operator network, terminal, Enterprise Network), terminal income of 10.406 billion yuan, accounting for 27.59% of total revenue, profit margin increased significantly.

ZTE in early 2014 just set up a terminal division, and promoted to "Young" Zeng Xuzhong for the company executive vice President, Terminal Division CEO. In the first half of ZTE's earnings release, Zeng Xuzhong accepted the author's interview, on ZTE Mobile phone operation and adjustment for half a year to interpret. Zeng Xuzhong that the changes in ZTE's mobile phone mainly include:

1. Product change. ZTE has issued a number of star models continuously since April: Blue Yang 2, ZTE Secret, ZTE "Red Bull", Star one, etc., covering a 2000-800-yuan range. In terms of product design and pricing, ZTE slashed its low-end models, cutting more than 50% from 176 in 2013, and essentially abandoning ultra-low and entry-level models that were not actually profitable. The main features of the new models are support for 4G, product design and manufacturing processes, and improved software and ROM optimization.

2. Channel change. ZTE Mobile phone 2013 more than 85% sales through the operator to make the channel, the product is not actually in the hands of the right. In the first half of 2014, ZTE's secret, ZTE "Red Bull", star number and other key products of the operation of the plate based on its own, are to Jingdong, the cat, its own channels to the start of the plate. ZTE reported that the first half of the domestic electricity market sales from last year's 8% percentage increase to 12%. Zeng Xuzhong revealed: "2013 ZTE in the domestic market investment 100 million yuan for open channel construction, 2014 investment will continue to strengthen."

3, management team adjustment. After taking office, Zeng Xuzhong restructured the global layout of ZTE Terminal, formed four regional markets and appointed corresponding supervisors: Wuhai (China), Zhang Shumin (Asia Pacific), Cheng (North America), Kang Yulun (Europe-Africa market). Regional markets in the product, design, marketing, operator cooperation, channels of independent trader, independent settlement, performance and responsibility more clearly.

4. The rise of the American market. It is noteworthy that ZTE's mobile phone business in the first half of the 2014 has made significant progress, and the North American market has maintained rapid growth, with Asia-Pacific and Euler markets operating better than expected. In particular, the US market has performed well, the prepaid market ranked second, and successfully entered the US operator's pay-back market.

In the U.S. operator-led post-pay market, mainly by Samsung, Apple, Motorola, LG and other mobile phones, HTC in the first war with Apple after the failure in the pay market after the collapse, as the Chinese mainland enterprises ZTE mobile phone into the pay-back market is commendable. As U.S. operators gradually reduce subsidies, the prepaid market is also rising, as the market share of ZTE's second-hand handset has actually grabbed a good card location.

5. Talent Introduction. In software and ROM, ZTE introduced a research and development team from South Korea in the first half of the year, Zeng Xuzhong revealed that ROM has always been a domestic traditional mobile phone companies "soft rib", through the introduction of talent and strengthen research and development, ZTE Mobile Mifavor UI will be a major change this September. In hardware design, ZTE introduced the original BlackBerry design, interactive team, and to this end in the Canadian capital, Ottawa, the establishment of mobile phone research and Development center, Zeng Xuzhong said "the second half of ZTE Mobile phone design and interactive experience will be significantly changed."

6. Invest in new mobile phone manufacturing plant. Domestic smart phone to the current stage, has developed to the main supply chain and production capacity of the competition, millet, hammer, such as relying on internet marketing, integration of industrial chain manufacturers, in the early stages of development exposed the problem. The domestic handset actually does not lack the generation factory, but lacks the world-class manufacture factory. ZTE invested its current largest manufacturing facility in Xian in July this year. Zeng Xuzhong called the "ACW Model": American-style innovation and design, Chinese manufacturing, global sales.

Overall, ZTE Mobile phone 2014 in the first half of the product design, manufacturing control, channel concessions, management team and talent introduction and so on have improved, but in the mobile phone industry into the background of the big shuffle, the challenge is also constantly strengthening:

1. Supply chain and delivery. As a traditional handset manufacturers, supply chain should be ZTE's advantage. However, with the Zeng Xuzhong of product design, technology requirements for a substantial increase, and product thinking from the service operators in the low-end order market to high-end transformation, coupled with ZTE April to release a series of 4G mobile phones, ZTE's original supply chain system is a relatively large challenge. For annual shipments of the target 60 million of domestic mobile phone manufacturers, supply chain adjustment will be the primary issue to be faced with the transformation.

2, the Chinese market. According to earnings, the first half of ZTE's mobile phones in the U.S. and Asia-Pacific market growth in shipments and market share significantly, margin significantly increased. But market share in China is actually slipping. On the one hand, this is related to Zeng Xuzhong's product and channel adjustment strategies: drastically reducing the number of low-end models in the operator's system, vigorously developing electric and public channels, and losing all models, the Chinese market is currently in the midst of the most important overhaul of ZTE's mobile phone, and the pains of growth must be experienced. But China has become the world's most competitive, manufacturers shuffle the most serious mobile phone market, leaving ZTE mobile phone to actively adjust the time is not really much. How to shorten the "throes" period of ZTE's mobile phone will determine its future share and trend in the Chinese market.

3. Brand and marketing. As a traditional handset manufacturer, ZTE's mobile phone urgently needs brand breakthrough. How to better use the Internet, social platforms, new media and from the media, how to better use the strategic partner NBA concept, how to more accurate ground to convey product information and brand concept, will become ZTE Mobile phone breakthrough in the second half of the focus direction.

4. Team integration. ZTE Mobile phone system in the first half of the large regional market and management team adjustment changes larger, external talent also more, how to integrate the new team, so quickly in the global market changes under the formation of cohesion and combat effectiveness, will fully test the Zeng Xuzhong management wisdom.