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ZTE Corporation
Formerly called
Zhongxing Telecommunication Equipment Corporation
Public
Traded as
SZSE: 000063 (A share)
SEHK763 (H share)
ISIN CNE000000TK5
CNE1000004Y2
Industry Telecommunications equipment
Networking equipment
Founded 1985; 33 years ago (1985)
Founder Hou Weigui (Chinese: 侯為貴; pinyin: Hóu Wéiguì)
Headquarters Shenzhen, China
Area served
Worldwide
Key people
Yin Yimin (Chairman)
Zhao Xianming (President and Executive Director)[1]
Products Mobile phones, smartphones, tablet computers, hardware, software and services to telecommunications service providers and enterprises
Revenue Increase CN¥108.815 billion (2017)
Increase CN¥6.752 billion (2017)
Decrease CN¥903.4 million (2017)
Total assets Increase CN¥143.962 billion (2017)
Total equity Increase CN¥31.647 billion (2017)
Owner Zhongxingxin (30.34%)
Number of employees
74,773 (2017)
Subsidiaries Nubia Technology (49.9%)
ZTEsoft
Zonergy
Website www.zte.com.cn
www.ztedevice.com
Footnotes / references
In consolidated financial statement;[1] shareholders' equity figure are excluding perpetual capital instrument
ZTE Corporation
Simplified Chinese 中兴通讯股份有限公司
Traditional Chinese 中興通訊股份有限公司
Literal meaning China-Prosperity Communications Company Limited by Shares
Alternative Chinese name
Simplified Chinese 中兴通讯
Traditional Chinese 中興通訊
Literal meaning China-Prosperity Communications
Second alternative Chinese name
Simplified Chinese 中兴
Traditional Chinese 中興
Literal meaning China-Prosperity [or the word itself: resurgence]

ZTE Corporation is a Chinese multinational telecommunications equipment and systems company headquartered in Shenzhen, Guangdong.

ZTE operates in three business units: carrier networks (54%), terminals (29%) and telecommunication (17%). ZTE's core products are wireless, exchange, access, optical transmission, and data telecommunications gear; mobile phones; and telecommunications software.[2] It also offers products that provide value-added services,[3] such as video on demand and streaming media.[4] ZTE primarily sells products under its own name but it is also an OEM.[5] ZTE is one of the top five largest smartphone manufacturers in its home market.[6]

As with Huawei, the company has faced criticism in the United States over potential ties to the Chinese government that could enable surveillance. In 2017, ZTE was fined for illegally exporting U.S. technology to Iran and North Korea. In April 2018, after failing to properly reprimand the employees involved, the U.S. Department of Commerce banned U.S. companies from exporting to ZTE for seven years.

History[edit]

ZTE, initially founded as Zhongxing Semiconductor Co., Ltd in Shenzhen, Guangdong province, in 1985, was incorporated by a group of investors associated with China's Ministry of Aerospace.[7] In March 1993, Zhongxing Semiconductor changed its name to Zhongxing New Telecommunications Equipment Co., Ltd with capital of RMB 3 million, and created a new business model as a "state-owned and private-operating" economic entity. Ties to the state notwithstanding, the firm evolved into the publicly traded ZTE Corporation, having made an initial public offering (IPO) on the Shenzhen stock exchange in 1997 and another on the Hong Kong stock exchange in December 2004.[7]

While the company initially profited from domestic sales,[8] it vowed to use proceeds of its 2004 Hong Kong IPO to further expand R&D, overseas sales to developed nations, and overseas production.[9] Making headway in the international telecom market in 2006, it took 40% of new global orders for CDMA networks[10] topping the world CDMA equipment market by number of shipments.[11] That same year also saw ZTE find a customer in the Canadian Telus[12] and membership in the Wi-Fi Alliance.[13] More customers in developed nations soon followed Telus' lead, and in 2007 ZTE sold to UK's Vodafone, Spain's Telefonica, and the Australian Telstra,[12] in addition to garnering the greatest number of CDMA contracts globally.[14] By 2008 ZTE had achieved a global customer base, with sales in 140 countries.[12]

By 2009, the company had become the third-largest vendor of GSM telecom equipment worldwide, and about 20% of all GSM gear sold throughout the world that year was ZTE branded.[15] As of 2011 it holds around 7% of the key 3GPP Long Term evolution patents[16] and that same year launched the world's first smartphone with dual GPS/GLONASS navigation, MTS 945. ZTE claims to devote 10% of its annual revenue to research and development, producing patents and utility licenses at a rapid pace.[17][18] ZTE has filed 48,000 patents globally, with more than 13,000 granted. In two consecutive years (2011 and 2012), ZTE was granted the largest number of patent applications globally,[19] which is a first for a Chinese company.[20]

In March 2017, ZTE was fined a total of US$1.19 billion by the U.S. Department of Commerce for exporting U.S. technology to Iran and North Korea in violation of sanctions. It is the largest-ever U.S. fine for export control violations.[21][22]

ZTE was allowed to continue working with U.S. companies, provided that it reprimand the employees involved in the violations. However, the Department of Commerce found that ZTE had violated these terms, having fired only 4 senior officials and still providing bonuses to 35 other employees involved in the violations. On 16 April 2018, the Department of Commerce banned U.S. companies from providing exports to ZTE for seven years.[23][24][25] This ban could prevent ZTE from producing devices with common Qualcomm processors, nor certified Android devices with Google Mobile Services software.[26]

Subsidiaries[edit]

The ZTE Tower in Shenzhen

ZTE has several international subsidiaries.

ZTEsoft Technology[edit]

As a subsidiary of ZTE Corporation, ZTEsoft engages in ICT industry and specializes in providing BSS/OSS, big data products and services to telecom operators, and ICT, smart city and industry products and services to enterprises and governments.

Nubia Technology[edit]

Nubia Technology was a fully owned subsidiary of ZTE Corporation. The company has subsequently disposed of the majority of its equity in the company. In 2017 it reduced its stake to 49.9%[27]

PT. ZTE Indonesia[edit]

PT ZTE Indonesia were representative of ZTE with has many customer with PT Telkom Indonesia tbk, PT Telekomunikasi Seluler tbk, PT Indosat tbk, PT Smartfren tbk, PT XL Axiata, and also supply hand held with ZTE Trademarks.

ZTE (Australia) Pty Ltd[edit]

ZTE entered the Australian market in 2005,[28] and as of 2009 ZTE (Australia) Pty Ltd[29] acts as the exclusive supplier of ZTE handsets, network cards, and as OEM Supplier to customers, such as Telstra, and Optus in Australia.

ZTE Deutschland GmbH[edit]

ZTE Deutschland GmbH was founded in 2005 with headquarters in Düsseldorf; it, as of 2008, had hired 50 people, 60% of whom were recruited locally.[30] ZTE Deutschland GmbH partners with German football club Borussia Mönchengladbach for the seasons of 2016/17 and 2017/18.[31]

ZTE USA Inc[edit]

A North American subsidiary of ZTE,[32] with headquarters in Richardson, Texas,[33] ZTE USA Inc offers wireless handset and networking products in the US. ZTE USA partnered with NBA's Houston Rockets for the season of 2013–2014.[32]

ZTE Telecom India Pvt Ltd[edit]

ZTE Telecom India Private Limited provides distributes telecom equipment and systems. The company also provides repair, support, and maintenance services for its telecom equipment. ZTE Telecom India Private Limited was formerly known as ZTE Kangxun Telecom Company India Private Limited. The company was founded in 2003 and is based in Gurgaon, India.

ZTE (HK) Ltd[edit]

ZTE (Hong Kong) Ltd. (China) serves in such areas as global contract manufacturing.

ZTE do Brasil Ltda.[edit]

ZTE do Brasil Ltda. was founded in 2002 with headquarters in São Paulo and offices in Rio de Janeiro and Brasília; providing mobile devices and network products for the Brazilian market.

ZTE Myanmar[edit]

ZTE Myanmar is also a fully owned subsidiary of ZTE Corporation.

Zonergy[edit]

Zonergy is a renewables company with interests in electricity generation through solar parks in China and Pakistan and palm oil cultivation in Indonesia to produce biofuels. ZTE is a major shareholder and was instrumental in the creation of the company in 2007 but holds a minority of the shares in the entity.[34]

ZTEsoft Technology India Pvt. Ltd.[edit]

As a subsidiary of ZTE Corporation, ZTEsoft India engages in ICT industry and specializes in providing BSS/OSS, big data products and services to telecom operators, and ICT, smart city solutions and industry products and services to enterprises and governments. Company has several tie-ups with regional governments for implementation of smart city solutions.

ZTEsoft Singapore Technology Pte. Ltd.[edit]

As a subsidiary of ZTE Corporation, ZTEsoft Singapore engages in ICT industry and specializes in providing BSS/OSS, big data products and services to telecom operators, and ICT, smart city solutions and industry products and services to enterprises and governments.

Products[edit]

A ZTE Blade S6 Plus

ZTE operates in three business segments – Carrier Networks(~54%)-Terminals(~29%)-Telecommunication(~17%) Products can be roughly arranged into three categories: equipment used by network operators (links and nodes, etc.), equipment used to access networks (terminals), and services, which includes software.[35] On October 2010, ZTE's unified encryption module received U.S./Canada FIPS140-2 security certification,[36][37] which made ZTE the first vendor from P.R. China to successfully validate modules according to the NIST FIPS140-2 standard under the CMVP program.[38]

Consumer electronics[edit]

Mobile phones

As of 2012, ZTE is the 4th largest mobile phone vendor.[39] It also placed fifth on IDC's smartphone vendor leaderboard.[40][41] Strategy Analytics counts ZTE as 4th largest smartphone vendor (5% market share) in 2Q2013.[42] It also manufactures tablets.[43][44][45]

In November 2017, ZTE announced the Axon M [46][47]. The two screens can run separate appications, or spread one app over the combined display size of 6.75-inches.[48] The second screen also works as a kickstand[49].

Mobile Hotspots

The MF60 and MF80 4G mobile hotspots were announced in August 2011.[50]

Windows Phone

At Mobile World Congress 2014 in Spain, Microsoft announced that ZTE is the latest hardware partner of Windows Phone platform.[51]

Network Operators Equipment, Network Nodes and Network Elements[edit]

ZTE is also a provider of Core Routing and Core Network equipment, also known as Network Elements such as:

Customers[edit]

ZTE booth at Mobile World Congress 2015 in Barcelona

A good number of ZTE's customers are outside of China. During the 2000s, the majority were developing country mobile network operators, but ZTE products see use in developed countries as well. The UK's Vodafone, Canadian Telus, Australia's Telstra, as well as France Telecom have all purchased equipment from ZTE.[53]

Many Chinese companies are also ZTE customers, including China Netcom,[54] China Mobile,[55] China Satcom,[56] China Telecom,[57] and China Unicom.[3][58]

In the United States, ZTE USA manufactures mobile phones and broadband devices for multiple wireless carriers including AT&T, Boost Mobile, Cricket Wireless, MetroPCS, Sprint, T-Mobile, TracFone, Verizon, and Virgin Mobile. It may also sell network equipment to these carriers.

Sponsorship[edit]

In May 2016, ZTE became the co-sponsor of German club Borussia Mönchengladbach.[59]

In May 2016, ZTE's Nubia Technology brand signed football star Cristiano Ronaldo as a brand ambassador for a reported fee of $4 million.[60]

Controversies[edit]

Bribes for contracts[edit]

Norway

Norwegian telecommunications giant Telenor, one of the world's largest mobile operators, banned ZTE from "participating in tenders and new business opportunities for 6 months because of an alleged breach of its code of conduct in a procurement proceeding" during a five-month time span ending in March 2009.[61]

Philippines

Contract negotiations to build a broadband network for the Philippine government may have included improper activities.[62] The project was later cancelled.[62]

Surveillance system sale[edit]

In December 2010, ZTE sold systems for eavesdropping on phone and Internet communications to the government-controlled Telecommunication Company of Iran.[63] This system may help Iran monitor and track political dissidents.[citation needed]

Handset security[edit]

At least one ZTE mobile phone (sold as the ZTE Score in the United States by Cricket and MetroPCS) can be remotely accessed by anyone with an easily obtained password.[39]

ZTE, as well as Huawei, have faced criticism by the United States' government, due to allegations that the companies have ties to the Chinese government that could enable surveillance.[64] In 2011, the House Permanent Select Committee on Intelligence issued a report recommending that the government be prohibited from purchasing equipment from the firms, citing them as possible threats to national security.[65][66][67]

Shareholders[edit]

As of 31 December 2017, Zhongxing Xin (Chinese: 中興新; literally: "Zhongxing New"; aka ZTE Holdings), an intermediate holding company, owned 30.34% stake of ZTE.[1]:110–112

The shareholders of ZTE Holdings were Xi'an Microelectronics (Chinese: 西安微电子技术研究所; a subsidiary of China Academy of Aerospace Electronics Technology) for 34%, Aerospace Guangyu (Chinese: 深圳航天广宇工业有限公司; a subsidiary of CASIC Shenzhen Group) for 14.5%, Zhongxing WXT (Chinese: 深圳市中兴维先通设备有限公司; aka Zhongxing Weixiantong) for 49% and a private equity fund Guoxing Ruike (Chinese: 國興睿科) for 2.5%.[68]:87 The first two entities were state-owned enterprise, nominating 5 out 9 directors of ZTE Holdings, while Zhongxing WXT was owned by the founders of ZTE, including Hou Weigui, which Zhongxing WXT nominated the rest of the directors (4 out 9) of ZTE Holdings.[1]:110–112

Due to the mixed-ownership, ZTE was sometimes described as state-owned.[69]

References[edit]

  1. ^ a b c d "Annual Report 2017" (PDF). ZTE. 26 March 2018. Retrieved 8 April 2018. 
  2. ^ Product Portfolio ZTE
  3. ^ a b ZTE Secures More than Half of China Unicom GSM Value-Added Service System 2008 Tender ZTE, 15 December 2008
  4. ^ ZTE Corp's Company Description Bloomberg BusinessWeek
  5. ^ UPDATE 3-LSI sees second half better than first reuters.com, Wed 26 January 2011 9:14 pm EST
  6. ^ For top five in China, see "Apple Competes for Bigger Slice of China's Smartphone Market Share." Khaleej Times (Dubai, United Arab Emirates). Al Bawaba (Middle East) Ltd. 2014. 22 May. 2014
  7. ^ a b 20 Years History of ZTE Corporation by Mr. Huang Guo in 2005
  8. ^ UPDATE 1-ZTE says 2010 net profit up 32 pct on better sales reuters.com, Thu 27 January 2011
  9. ^ A Global Telecom Titan Called...ZTE? Bloomberg BusinessWeek, 7 March 2005
  10. ^ China-based Huawei and Murali make headway in global telecom market DigiTimes.com. 9 March 2007
  11. ^ ZTE tops 2006 international CDMA market. CIOL Bureau. 8 March 2007
  12. ^ a b c History ZTE
  13. ^ ZTE joins Wi-Fi Alliance----- one of the first Chinese members ZTE, 30 August 2006
  14. ^ ZTE Tops 2007 Global CDMA Market ZTE, 30 January 2008
  15. ^ INTERVIEW-China's ZTE aims for fifth of global GSM gear market reuters.com, Tue 17 November 2009 10:53 pm EST
  16. ^ China's ZTE targets 10 pct of LTE patents reuters, 11 January 2011
  17. ^ "ZTE Ranked World No. 1 in Patent Applications for Second Straight Year". CNBC. Retrieved 20 March 2013. 
  18. ^ Strong Growth in Demand for Intellectual Property Rights in 2012
  19. ^ International Patent Filings Set New Record in 2011
  20. ^ Yahoo reported ZTE as first Chinese company to rank No.1 in global patent applications
  21. ^ "China's ZTE Pleads Guilty in U.S. on Iran Sanctions Settlement". Bloomberg News. Retrieved 7 March 2017. 
  22. ^ "ZTE Will Pay Record Fine for Sales to Iran, North Korea". PC Magazine. Retrieved 7 March 2017. 
  23. ^ "U.S. companies banned from selling components to ZTE". TechCrunch. Retrieved 2018-04-16. 
  24. ^ "ZTE can no longer buy Qualcomm chips after US ban". The Verge. Retrieved 2018-04-16. 
  25. ^ "Secretary Ross Announces Activation of ZTE Denial Order in Response to Repeated False Statements to the U.S. Government". Department of Commerce. 2018-04-16. Retrieved 2018-04-16. 
  26. ^ "ZTE Seeks Fix With U.S. Ban Threatening Access to Android". Bloomberg.com. 2018-04-17. Retrieved 2018-04-18. 
  27. ^ Disposal of 10.1% of the equity interest in Nubia Technology Limited, ZTE Corporation, 27 July 2017, Retrieved on 8 April 2018
  28. ^ About ZTE ZTE Australia Official Site
  29. ^ Global Sales Offices > Asia Pacific ZTE
  30. ^ ZTE opens new office in Bonn, Germany ZTE, 18 November 2008
  31. ^ ZTE Becomes Co-Sponsor of Top German Football Team Borussia Mönchengladbach
  32. ^ a b Pocket Communications Launches ZTE's Tri-Band C79 and C78 ZTE,2009-04-02
  33. ^ ZTE Opens LTE Laboratory in North America ZTE, 20 October 2009
  34. ^ Brautigam, Deborah (2015). Will Africa Feed China?. New York: Oxford University Press. 
  35. ^ "ZTE Corp (ZTCOF.PK): Overview; Full description". Reuters. Retrieved 13 May 2012. 
  36. ^ ZTE Unified Platform Cryptographic Library Version 1.1
  37. ^ ZTE Unified Element Management Platform Cryptographic Module Version 4.11.10
  38. ^ ATSEC participated in ZTE products security evaluations
  39. ^ a b Jeremy Wagstaff; Lee Chyen Yee (18 May 2012). "ZTE confirms security hole in U.S. phone". Reuters. Retrieved 20 May 2012. 
  40. ^ IDC: Samsung extends lead over Apple while Chinese vendors increase influence
  41. ^ IDC: Growth Accelerates in the Worldwide Mobile Phone and Smartphone Markets in the second Quarter, 2013 Archived 26 June 2014 at the Wayback Machine.
  42. ^ Strategy Analytics: Global Smartphone shipments Hit Record 230 Million Units in Q2 2013
  43. ^ ZTE Launches Two Android Tablets: Dual-core Z-pad and Android 3.0 V11 at MWC
  44. ^ ZTE V9 Android tablet revealed androidcommunity.com, 12 October 2010
  45. ^ V9 product page ZTE
  46. ^ https://www.youtube.com/watch?v=jpdR-bdV08c
  47. ^ http://www.techradar.com/news/watch-how-zte-axon-ms-dual-screen-transforms-your-daily-smartphone-habits
  48. ^ https://www.theverge.com/2017/11/17/16667508/zte-axon-m-dual-screen-smartphone-review
  49. ^ https://wccftech.com/zte-axon-m-foldable-phone/
  50. ^ [1] Archived 27 June 2012 at the Wayback Machine.
  51. ^ "Microsoft Announces ZTE As New Windows Phone Hardware Partner". 
  52. ^ [2]
  53. ^ For Vodafone and France Telecom sales, see ZTE Wins China Mobile WAP Expansion Contract ZTE, 16 October 2007
  54. ^ China Netcom´s first IPTV agreement confirms ZTE as major international IPTV network provider ZTE, 30 August 2006
  55. ^ ZTE to Install the World´s Largest Optical Transmission Network ZTE, 30 August 2006
  56. ^ ZTE and China Satcom to provide GoTa network for China´s 10th National Games ZTE, 30 August 2006
  57. ^ ZTE Bags Major Value Added Services Contracts in China ZTE, 2006/11/14
  58. ^
  59. ^ "Chinese brand ZTE becomes co-sponsor of Borussia Mönchengladbach". GSM Insider. 22 May 2016. 
  60. ^ "Chinese brand Nubia signs Cristiano Ronaldo as brand ambassador". GSM Insider. 22 May 2016. 
  61. ^ Norway's telco giant bans ZTE for 6 months abs-cbnnews.com, 21 October 2008
  62. ^ a b Arroyo suspends telecoms deal with Chinese firm reuters.com, 22 September 2007
  63. ^ Steve Stecklow (22 March 2012). "Special Report: Chinese firm helps Iran spy on citizens". Reuters. Retrieved 23 March 2012. 
  64. ^ Salinas, Sara (2018-02-13). "Six top US intelligence chiefs caution against buying Huawei phones". CNBC. Retrieved 2018-02-15. 
  65. ^ Schmidt, Michael S.; Bradsher, Keith; Hauser, Christine (2012-10-08). "U.S. Panel Calls Huawei and ZTE 'National Security Threat'". The New York Times. ISSN 0362-4331. Retrieved 2018-04-16. 
  66. ^ "U.S. intelligence agencies are still warning against buying Huawei and ZTE phones". TechCrunch. Retrieved 2018-04-16. 
  67. ^ "A new bill would ban the US government from using Huawei and ZTE phones". The Verge. Retrieved 2018-04-16. 
  68. ^ "Nián dù bào gào 2017" 年度報告2017 [Annual Report 2017] (PDF) (in Chinese) – via Hong Kong Exchanges and Clearing website. 
  69. ^ Milhaupt, Curtis J.; Zheng, Wentong. "Beyond Ownership: State Capitalism and the Chinese Firm". Columbia University. Retrieved 19 April 2018. 

External links[edit]

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