At the breakout session today -- in ZTE's annual analyst event in China -- the keywords are online channel and voice interaction.
Like many other Chinese vendors, ZTE has emphasized the critical role that online distribution channels play in branding equity enhancement. For instance, all of its three 4G models recently launched focus on online channels by working with big Chinese e-tailers, such as JD and T-Mall. ZTE targets that 20% of total smartphone sales this year will go via the online channel. Interestingly, offline and online is not completely exclusive. In contrast, as we have seen from Xiaomi, ZTE also tries to leverage online resources to do branding, and blur the boundary between the two to bring more online models to offline channels to generate volumes. For example, it plans to open up over hundreds of Nubia physical stores this year to enhance the penetration into offline channels.
ZTE showcased more voice-recognition usages today, such as voice-print unlocking, voice navigation, etc. ZTE claims the voice-recognition rate has improved to over 90% with its own technology by working with Nuance and other technical partners. Moreover, it will adopt more voice-interaction functions by integrating it with ZTE's own UI-MiFavor 3.0 later this year. We like the idea very much, but it remains to be seen how users / consumers will embrace it or not -- the industry might need a more influential American player, such as Apple, to make voice-recognition adoption more widely available.
Something missing today from the session was the topic of LTE-Advanced -- it was not really covered. It is also surprising that ZTE confirmed they will adopt their own chipset mainly in modem products -- rather than their own smartphones -- in the short term, making us suspect it might still need time to improve and optimize the chipset products for cellphones.