Mobile phone and telecommunications infrastructure manufacturer ZTE today announced a 21.6% increase in operating revenue to RMB 37.35bn (£3.57bn) in the six months ended 30 June 2011.
In the first half of 2011, the company‘s net profit was RMB 768.52m (£73.63m), a fall of 12.4% compared with the same period last year. ZTE attributed the fall in profit to the company’s market share expansion strategy, a change in product structure and pending software VAT refund subsidies.
ZTE’s revenue from international markets increased by 36.4% year on year to RMB 20.81bn (£1.99bn), accounting for 55.7% of the company’s operating revenue.
In a statement, ZTE said it had adopted an aggressive approach in its efforts to win a bigger slice of the key smartphone market. The company shipped 60 million terminal products, including 35 million smartphones, in the first six months of the year. This represents a 400% increase year on year in smartphone sales. In Q2, ZTE was fifth in analyst IDC's mobile tracker report for global shipments with 4.5% of the market.
Operating revenue for the company’s handset products as a percentage of total operating revenue increased to 30% from 25.4% in the same period last year. Overall gross profit margin for handset products declined to 19.6% from 22.7%.
The company said it had invested strategically in telecommunications services, such as cloud computing and the Internet of Things. ZTE also set up an internal venture capital fund to seek market growth opportunities. ZTE said its wireless products contract revenue increased substantially in the interim period.