As a leading player in China’s telecommunications industry, ZTE has faced multiple uncertainties over the past year. Entering 2023, with the improvement of the epidemic situation, ZTE actively stepped out of the country and participated in Mobile World Congress 2023 (MWC 2023) with the theme of „Shaping Digital Innovation“.
New products and new technologies
Like Huawei, operation has always been a fundamental part of ZTE’s business. Over the past year, the global communications industry has experienced macro changes and political resistance to Chinese companies in some regions. Even so, ZTE still achieved remarkable results, with the world’s second-largest shipment of 5G base stations, the world’s second-largest 5G core network revenue, the world’s third-largest market share for optical network operators, and the world’s second-largest overall market share for fixed networks.
At MWC, ZTE unveiled several hardcore technologies in the operator field. For example, the latest wireless UniSite minimalist solution, which supports 5G-Advanced evolution; Turbo Core solution, which deeply integrates software flexibility and hardware efficiency; full-scene high-performance 400G transmission solution, with multiplied capacity and the longest backbone transmission distance in the industry; the industry’s highest integrated 10G PON single board; and the latest generation Reconfigurable Intelligent Supersurface (RIS) solution, Dynamic RIS, etc.
ZTE is also actively exploring foreign operator markets. At this year’s MWC, Telkomsel, Indonesia’s largest mobile operator, and ZTE announced the completion of a 2.3GHz band-based 5G network sea surface ultra-long-range base station coverage test, providing a solid digital base for 5G+ smart fisheries and other applications. The two parties also signed a Memorandum of Understanding (MOU) to collaborate deeply in the area of 5G B2B business and jointly promote 5G digital transformation in Indonesia’s pillar industry sectors.
To pursue sustainable and high-quality development, ZTE has proposed the principle of “three directions and two curves.” “Three directions” refer to innovation, globalization and end-to-end product solutions. “Two curves” mean that the company sticks to solidifying its position, keeping the steady growth of operators’ business in the first curve while creating its new horizon to achieve the rapid growth of government and enterprise business, terminals business and new business in the second curve.
In this year’s MWC, ZTE’s „second curve“ performance was eye-catching. For example, in the smart terminal business, which is of more concern to the general public, ZTE displayed a full range of consumer electronics products covering ZTE Axon, ZTE Blade, and Nubia, as well as the entire family of MBB, FWA, and IoT products, and brought innovative products such as the world’s first AI technology naked eye 3D tablet and AR glasses for the super audio-visual experience.
Open the upper limit and expand the boundary
Wang Xiang, ZTE Chief Strategy Officer, pointed out last year that the global communication market pattern has taken shape. In the face of the transformation of the industry into digital intelligence and the energy change caused by green and low-carbon development opportunities, the key is how ZTE can use its accumulated capabilities in other fields to open the upper limit of the enterprise, expand the industrial boundary, and develop the „second curve”.
ZTE chose the tracks based on the original CT business, such as servers and storage, terminals (including smart home terminals), industrial digitization, digital energy, and automotive electronics, as breakthroughs to strategically expand along areas of the market or customer and technology advantages.
ZTE has set up industry task forces one after another in the past year to focus on key industries and continue to plow deeper. At present, ZTE’s mining, metallurgy, and steel task force has achieved cooperation with many head enterprises in the industry and promoted the replication of industry solutions; the automotive electronics task force has achieved cooperation with head automotive enterprises in automotive operating systems.
The latest financial report shows that ZTE’s „second curve“ has shown rapid growth, having the company’s innovation business revenue growth of more than 40% year-on-year, and server and storage revenue of nearly 10 billion yuan, an increase of nearly 80% year-on-year.
Since 2018, ZTE has developed a „three-phase“ strategy of recovery, development, and transcendence. With domestic 5G entering large-scale construction and ZTE continuously optimizing its overseas products and market layout, the company has completed the expected goals of the strategic recovery and development phases,
Behind the hard strength, strong R&D is indispensable
The diversification of its business and the expansion of cooperation with more partners help ZTE improve its strength. Both history and reality are reminding the communications giant that it cannot relax its R&D investment.
This is also an important lesson for the entire Chinese technology industry. The third collective study of the China’s Central Political Bureau not long ago pointed out the need to fight the battle of localization of scientific and technological instruments and equipment, operating systems, and basic software, to improve the level of localization substitution and application scale, and to strive for the early realization of the use of China’s research platforms and instruments to solve major basic research problems.
It is gratifying to note that ZTE’s R&D intensity has been high in recent years. From 2015 to 2021, ZTE’s R&D investment has increased from 12.2 billion CNY to 21.60 billion CNY, accounting for 17.6% of revenue in 2022.
ZTE’s continuous high intensity investment in R&D is the basis for the company’s continuous innovation. In the face of the booming digital economy and the wave of industrial digital transformation, ZTE has the core capabilities of „end, network, cloud, and intelligence“ to continuously build the foundation, contribute intelligence, and empower industrial partners.
(Source: eye shenzhen, ZTE, TelecomLead, Yahoo Finance)