GlobalData: ZTE phones disappearing from US prepaid market due to political pressure

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Once a leader in the US prepaid market, ZTE is disappearing from US prepaid operator shelves due to its troubles with the US government, says GlobalData, a data and analytics company.

GlobalData’s pricing tracker, ‘Handset Pricing and Promotions, Web, U.S.’, shows that the number of ZTE smartphones on prepaid operator shelves fell 48% from June 2018 to September 2018. The sudden drop in the number of ZTE devices is an indication of wariness on part of US carriers to engage with ZTE due to political pressure.

Anisha Bhatia, senior analyst, consumer services, platforms and devices at GlobalData comments, “US carriers are the gatekeepers to smartphone sales, and they are risk averse in a heavily regulated market.

“GlobalData’s numbers show that nearly every US prepaid carrier offers ZTE phones, with ZTE making up as much as 14% of the devices carried by some prepaid operators. The percentage is even higher below the $150 price point.”

According to GlobalData’s research, at the end of September 2018, ZTE had only 21 phone models in prepaid – half the number it had three months ago.

Phones disappear from shelves all the time; but the key here is the large number of dropped phones in a single quarter, and ZTE has not replaced them with new devices.

Bhatia concludes: “To find its way back on US shelves, ZTE should restructure its operations to bring fiscal transparency and distance its device business from its infrastructure business. ZTE could rebrand its devices group to something without ‘ZTE’ in it and use its premium Axon sub-brand to reinvent itself across regions.”