Working with carriers such as AT&T Inc, Boost Worldwide Inc's Boost Mobile, MetroPCS, and Cricket Communications Inc, and by making phones available without a contract or activation fees, ZTE is luring customers away from its rivals - both in the US and on its home turf. In China, ZTE has "taken full advantage of the nation's obsession with the smartphone, especially for those not wanting to spend potentially thousands of dollars for an Apple or Samsung flagship phone, and contract", DigitalTrends reported.
A recent study by PriceWaterhouseCoopers LLP found that no-contract plans generated 29.2 percent of total mobile service revenue in 2012, up 7 percent from the prior year. ZTE cited other studies showing that one in four new phone users are expected to choose a no-contract plan this year, increasing to one in three people by 2014.
ZTE's growth in the pre-paid market has surprised the industry. In February, a Nielsen study showed that just 15 percent of US smartphone buyers prefer a no-contract plan. By contrast, prepaid services are the choice of 51 percent of smartphone owners in China.
Chen noted in the interview that ZTE's research into customer preferences helped it overcome initial US resistance to prepaid plans. "We did some studies looking at what consumers care about. So we have a list of things that itemizes what kind of features they really like," he told Engadget.
"It's not what is talked about in the media, but actually what the consumer uses from day to day. That's why we've spent a lot of time and resources to improve those features and then bring that really true, unique user experience to consumers."
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