A relatively unknown Chinese smartphone maker is aiming to become the No. 3 smartphone maker in the U.S., and is targeting the relatively underserved no-contract user to get there.
While ZTE is currently No. 4 in the U.S—behind Apple, Samsung , and LG—the company's brand awareness has shot up dramatically in the past 12 months, and stands to gain even more thanks to a recent deal with New York City's Madison Square Garden.
"ZTE is 'the one to watch,'" Neil Mawston of Strategy Analytics said in an email. "ZTE is expanding rapidly in the prepaid market in the U.S., at Sprint and elsewhere, and it is (the) no. 4 smartphone player and the top Chinese brand in the North America region."
The company is targeting the prepaid and no-contract market, which currently makes up about 13 to 16 percent of the wireless phone numbers in the U.S.—and is growing, said Tuong Huy Nguyen, principal research analyst at Gartner. "I think we've seen some slight movement in favor of prepaid because (of) the economy and better, more affordable prepaid options."
Those plans can sometimes be as low as $10 a month without any commitment to continue, in contrast with a traditional two-year contract upward of $50 a month, plus taxes and early termination fees.
It's currently second place in the prepaid market (behind Samsung), a position it needs to hold if it aims to compete with better-known brands, some of whom it has already blown past in market share.