Case 5:16-cv-00179-RWS Document 287-17 Filed 08/07/18 Page 1 of 4 PageID #: 16842
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`Exhibit 14
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`How ZTE Accomplished What Other Chinese Phone Brands Haven't: Enter The U.S. And Japanese Market
`7/31/2018
`Case 5:16-cv-00179-RWS Document 287-17 Filed 08/07/18 Page 2 of 4 PageID #: 16843
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`How ZTE Accomplished What Other Chinese
`Phone Brands Haven't: Enter The U.S. And
`Japanese Market
`
`Ben Sin Contributor
`Oct 23, 2017, 04:37am • 5,906 views • #AllThingsMobile
`
`i
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`ZTE booth at MWC 2016. Photo: Pau Barrena/Bloomberg
`
`We know that Samsung, Apple and Huawei are the three largest phone companies in the world,
`followed by Vivo and Oppo in some order. But these rankings and stats only apply on a macro, global
`scale. Within each country is a different tale. That's why one of the things I do when I travel is observe
`the mobile landscape of that country. I'll pay attention to billboards, posters on mobile carrier stores,
`and eye what phone everyone is using on the train. It's fascinating to see the unique preferences of each
`country -- and realize that it isn't always as simple as "this phone brand is popular here because of
`marketing," sometimes, it's about the culture, history, and even politics, of that region.
`
`Huawei, for example, is huge in Europe and Southeast Asia, but has very little presence in the U.S. and
`Hong Kong -- the former due to a suspicious U.S. government weary of Huawei's supposed ties to the
`Chinese government; and the latter because Hongkongers have long had an aversion to mainland
`Chinese brands. Vivo and Oppo may be number four and five on the world chart, but it reached those
`numbers almost solely off China sales -- in the west, lower-ranked brands like LG or Sony have 10
`times more brand recognition.
`
`Samsung phones are popular almost across the entire globe, with the sole exception of Japan, where its
`phones are rarely seen on the streets, and the brand is literally invisible (because Samsung, out of tense
`Japan-Korea diplomatic relations, removes its own branding on products sold in Japan).
`
`Japan's mobile market is an interesting one. It is a relatively insular and proud country, and those
`traits worked in its favor in the 80s and 90s when it was the land of consumer electronics innovation.
`But its lack of desire to follow global trends eventually led to Japan's biggest tech companies
`completely missing out on the smartphone bandwagon. Eventually, Japanese people fell into two
`camps: they either stuck with local Japanese brands despite its outdated products, clinging onto flip
`phones years after other developed nations have moved on, or sucked it up and adopted the most
`mainstream smartphone available (iPhone). The latter is beginning to win out, and this is why Japan's
`mobile market share is more dominated by a single brand -- Apple -- more than anywhere
`else. (iPhones have an official 52% market share in Japan, but I reckon that percentage is higher in
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`https://www.forbes.com/sites/bensin/2017/10/23/how-zte-did-what-other-chinese-phone-companies-couldnt-enter-the-u-s-and-japanese-market/#499d… 1/3
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`How ZTE Accomplished What Other Chinese Phone Brands Haven't: Enter The U.S. And Japanese Market
`7/31/2018
`Case 5:16-cv-00179-RWS Document 287-17 Filed 08/07/18 Page 3 of 4 PageID #: 16844
`major cities, because I've traveled to Tokyo half a dozen times in the past few years, and it seems like
`three out of four people there use iPhones)
`
`And so ZTE's recently announced Axon M is unique in many ways. Not only is it a different type of
`phone than what everyone else is doing in 2017, it's that rare Chinese phone that will launch in both the
`U.S. and Japan -- two of the top three economies in the world.
`
`MORE FROM FORBES
`
`So how did ZTE manage to get into the Japanese market when no other Chinese brands have yet to do
`so? Well, according to Jeff Yee, ZTE's vice president of mobile devices marketing, the very idea of the
`ZTE Axon M came from Japan.
`
`"I'd say the idea started with [Japanese carrier] NTT Docomo," says Yee. "They went to us about two
`years ago and said, 'phones have been pretty much the same for the past decade ... let's do something
`different.'"
`
`Yee said that set in motion a partnership that will see the Axon M launch in Japan through NTT
`Docomo this month.
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`Jeff Yee at Consumer Electronics Show (CES) in Las Vegas this past January. Photo: David Paul Morris/Bloomberg
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`"We [ZTE and NTT Docomo] want to challenge the industry," says Yee.
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`As for the U.S. market, ZTE has actually been a presence in the U.S. for a couple years now. In fact,
`ZTE, with a 12.2% market share, is the fourth largest phone brand in North America behind Apple,
`Samsung, and LG. This has all been part of ZTE's core strategy known as "ACW -- America, China,
`Worldwide."
`
`Yes, as the order of the acronyms suggests, ZTE prioritizes the U.S. market over even its native China's.
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`"We are on pace to ship close to 20 million phones in the U.S. this year," says Yee. "We're the fastest
`growing OEM in the U.S."
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`The ZTE Axon M. BEN SIN
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`Being available on U.S. carriers is a crucial part of growing in stateside, as that is still the main channel
`through which American consumers get their phones. ZTE's partnerships with various U.S. carriers --
`its budget devices are available on the budget legs of major carriers like T-Mobile and Sprint -- along
`with its various sponsorship of NBA teams has helped it grow its market share in recent years. The
`Axon M may only be available on AT&T, but it will still reach a lot more American consumers than
`Huawei's phones, which are only sold unlocked at retail outlets like Amazon and Best Buy.
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`https://www.forbes.com/sites/bensin/2017/10/23/how-zte-did-what-other-chinese-phone-companies-couldnt-enter-the-u-s-and-japanese-market/#499d… 2/3
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`How ZTE Accomplished What Other Chinese Phone Brands Haven't: Enter The U.S. And Japanese Market
`7/31/2018
`Case 5:16-cv-00179-RWS Document 287-17 Filed 08/07/18 Page 4 of 4 PageID #: 16845
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`NTT Docomo is one of the world's largest wireless network operators in terms of subscribers. Photo: Akio Kon/Bloomberg
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`Getting a carrier partnership is something Huawei is actively working on, and there are
`strong indications that it will finally succeed next spring. But until then, ZTE is the only Chinese player
`in the game right now to the average American consumer.
`
`Of course, ZTE's status in America and Japan is enviable for other Chinese phonemakers, but there are
`enough smartphone markets in the world for companies to share. Xiaomi may have no presence in
`those two markets ZTE is focusing on, but it's extremely popular in India -- a country with more than
`double the population of U.S and Japan combined. Huawei, meanwhile, is not exactly hurting -- its
`billboards are all over Berlin, Barcelona, Milan, and other European cities I've visited this past year,
`and its Mate 10 is garnering a lot of positive buzz in North America.
`
`
`
`I've started a YouTube channel in an effort to provide multi-media coverage of gadgets I come across.
`If you're interested, please subscribe.
`
`I'm a Chinese-American journalist in Hong Kong, covering consumer tech in Asia. Before focusing on
`this exciting beat, I was a general culture writer and editor with bylines in the New York Times, Wall
`Street Journal, Sports Illustrated, New York Magazine, among others. ... MORE
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`https://www.forbes.com/sites/bensin/2017/10/23/how-zte-did-what-other-chinese-phone-companies-couldnt-enter-the-u-s-and-japanese-market/#499d… 3/3
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