ZTE Smartphone Shipments To Hit Bottom Amid Concerns Over Components Supply

Chinese multinational telecommunications equipment and systems company ZTE is expected to suffer the consequences of the technology ban that the U.S. imposed earlier this year.

Taiwanese supply chain sources told Digitimes Thursday that ZTE’s smartphone shipments will likely hit bottom since local channel operators are hesitant to promote the brand amid concerns over its components supply from U.S.-based partners. They are worried that ZTE may not have a steady supply in the aftermath of the technology ban.

Last year, ZTE ranked fourth in the U.S. smartphone market based on data collected by IHS Markit. Meanwhile, the company ranked eighth in the global smartphone shipments in 2017. But after what happened to the company in the previous months, it’s unlikely for it to enjoy steady growth for the rest of 2018. This is in spite of its resumed operations.

It can be noted that ZTE and the U.S. reached an agreement to lift the ban last month. The Chinese firm agreed to settle the penalties amounting to $1.4 billion and to overhaul its management. This week, the company appointed 20-year veteran Xu Ziyang as the new chief executive officer, replacing former leader Zhao Xianming.

Wang Xiyu, Gu Junying and Li Ying — who is also the chief financial officer — were chosen to be ZTE’s new vice presidents as the company moves forward following the ban, according to Bloomberg. After naming its new leaders, the Trump administration started easing some restrictions on ZTE, who lost about half of its value in Hong Kong as a result of the interruption in its operations.

ZTE isn’t the only Chinese company that’s expected to suffer in the second half of 2018. Meizu is plagued by corporate restructuring as a result of its dismal performance thus far. Gionee is facing financial difficulties because its smartphone shipments have been declining in recent months.

On the contrary, China’s first-tier smartphone makers — Huawei, Xiaomi, Oppo and Vivo — are predicted to expand their market share in China because their smartphone shipments have been steadily increasing. Their latest releases are also very promising and could all the more secure their significant growth this year.