Behind the change of ZTE mobile phone: eager to find the terminal breakthrough

Behind the change of ZTE mobile phone: eager to find the terminal breakthrough

The growth of operators' network equipment business is weak. The adjustment of ZTE's year-end is actually ready, and it is hoped to seize the major opportunities in the terminal market.

ZTE has made a 2013 full stop with a sudden adjustment, but for the outside world, this is a question mark.

On the afternoon of the last day of 2013, in a conference room at the headquarters of ZTE Corporation in Shenzhen Nanshan Science and Technology Park, Hou Weigui, the chairman who had not appeared for a long time, personally presided over a special meeting.

After the end of the five-hour meeting, ZTE’s internal decision-making body of the highest decision-making body officially announced that it will establish a terminal business unit to operate independently and upgrade the government and enterprise network to the company’s secondary business unit. In terms of personnel, the younger Zeng Xuezhong succeeded He Shiyou as the executive vice president, responsible for the operation of the company's terminal business in the future. Zhao Xianming, executive vice president, served as the company's CTO. Pang Shengqing, senior vice president, was responsible for the operation of the government and enterprise network business. He Shiyou executive vice president continued to serve as the company. executive director.

The biggest change in this adjustment is that, first of all, the terminal business and the government-enterprise network business respectively set up a business department system, which together with the original operator business constitutes the future three major businesses of ZTE. For the newly upgraded government and enterprise network division, ZTE needs to re-enter the IT field in the core of the government and enterprise network, and use the technology upgrade opportunities of cloud computing, big data, smart city and Internet of Things to find the gap.

Secondly, the terminal business unit will operate independently, that is, from procurement, production, research and development, sales, and delivery, and the financial accounting will be independent. The focus of personnel adjustment is that after the 70s, Zeng Xuezhong replaced the post-60 He Shiyou in charge of the ZTE terminal business, and the government and enterprise network set up the second-level leadership for the first time, and Pang Shengqing was fully responsible.

Why is there such an adjustment? This is the first reaction after the industry is informed of this. The answer or permission can be found in the 2014 New Year speech by ZTE President Shi Lirong.

In this speech, Shi Lirong said that in 2014, the company will have a major opportunity in the government and enterprise network and the terminal market. The company will strengthen and expand the market of operators, government enterprises and terminals, and strengthen the terminal products and government enterprises. Operation and continuity, giving more appropriate resources to ensure that opportunities can be seized.

In addition, the company encourages key management cadres to be younger and more consumerized. The senior vice president of Zeng Xuezhong, who is only 39 years old, is responsible for the overall business of the terminal. Zeng Xuezhong was responsible for the marketing of ZTE in China, and was rated as “high performance and Internet thinking”.

Another purpose of appointing or to strengthen the vertical operation and integration of end products in the structure, with three senior vice presidents in China, the United States and other major countries, can respond to market changes more efficiently and quickly.

However, another statement was learned from its internal channels. That is to say, the adjustment of the terminal has already started planning at the beginning of the year. At that time, it was agreed to use the performance of the terminal in 2013 as the final judgement. In fact, ZTE’s total sales volume this year is basically completed (about 40 million units), but it mainly depends on overseas markets (more than 70%), and the performance in China is not satisfactory.

The reason why China's poor performance is mainly due to the lack of a “B2C” channel in the terminal business.

Before the independent operation, the product planning and interaction of ZTE's terminal business is handled by the mobile phone business department located in Shanghai Zhangjiang Hi-Tech Park. The sales and marketing of the products mainly depend on the organizational platform of the Group B2B, as well as supply chain procurement and logistics. This disconnected business chain has often led to the release of new products, but the delivery has not been able to keep up with the rhythm, marketing has no way to start, missed the best time to market. For example, its high-end model GRANDS in 2012 was released from the release to the official distribution for nearly half a year, at least two months later than its peers. In the current fierce competition for smartphones, such a trader is obviously indirectly helping the opponent.

Of course, there are also external objective reasons. In the third quarter of 2013, the adjustment of domestic operator terminal strategies led to a decline in China's market share. ZTE immediately adjusted the mobile phone China area. The senior vice president Ye Weimin led the establishment of a dedicated management team in China, making changes in product strategy, design and development, market channels, and brand marketing. At the same time, the low-end mobile phone market affected by the price war in the domestic market was abandoned. However, from the final overall effect, it is too late.

In the face of the terminal's own problems, He Shiyou is not ignorant. As early as the beginning of this year, He Shiyou hinted at the interview with Tencent Technology. At that time, he admitted that ZTE mobile phone faced the transition from the operator's customized B2B business model to the B2C market. This is the biggest challenge for ZTE mobile phones. ZTE mobile phones must be separated from the organizational structure of the B2B system and undergo a comprehensive change in the channels, products and brands. The implication is that the terminals need to operate independently.

Earlier, I learned that the independent operation of ZTE terminals has been quietly carried out. The first is that almost all new product launches of the terminal are independent traders, including media invitations, event planning, etc., and the headquarters only has the right to know. In addition, the terminal's sales are completely independent and no longer depend on the group's sales platform. The complete divestiture of the sales team has undoubtedly accelerated the pace of independent operation of the terminal.

It seems that the adjustment at the end of the year is not sudden, but it is prepared.

The terminal is a breakthrough!

At present, due to the growing ceiling of operators' network equipment business, the mainstream communication equipment manufacturers in the world are seeking breakthroughs in different ways.

Ericsson focuses on the global professional services market, and Nokia Siemens Group focuses on the mobile broadband market. ZTE, similar to Huawei, has chosen the transformation strategy of “operator business, government business, and terminal business”.

At present, the business income from government and enterprise network accounts for nearly 20% of ZTE's overall revenue, and terminals account for 40%. The rest are carrier business. The terminal is regarded by the outside world as a breakthrough for ZTE to get rid of losses.

According to the latest data from market research institute IDC, ZTE’s mobile phone shipments totaled 65 million units and smartphones reached 35 million units in 2012. It has become the world’s fourth largest mobile phone manufacturer, which is the top three mobile phones in the world within 3 years proposed by ZTE in 2011. The goal has been a step away.

According to ZTE's plan, the global shipment target for smartphones in 2014 was 60 million units, and the revenue accounted for 50% of the total. However, China cannot get a significant share of the world's largest smartphone market, and the world's top three roads will still be long.

Of course, we must also look at how the Zeng Xuezhong, a young Zhuang, who was in the upper ranks of the upper class, exerted his fists. According to ZTE insiders, Zeng Xuezhong is a marketing expert, especially good at playing Internet marketing. He enjoys the reputation of “Zeng billion” and is also one of the “Big King Kong” with outstanding internal sales performance.

Previously, Zeng Xuezhong said that in 2014 and even in the future, it will invest hundreds of millions of yuan to strengthen the construction of domestic open channels, especially in the promotion of e-commerce channels. On the day of this adjustment, the long-awaited ZTE Mobile Mall was officially launched.


Under the leadership of Internet marketing expert Zeng Xuezhong, is there any hope for ZTE mobile phone to go further? This is the problem to be solved in 2014.

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