China's ZTE wants to reach consumers directly with its Nubia smartphone brand

ZTE has released two new handsets carrying its Nubia brand

Ni Fei, CEO of ZTE's Nubia handset division.

Ni Fei, CEO of ZTE's Nubia handset division.

The name Nubia might conjure up images of Africa, Egyptian pharaohs and early civilization. But perhaps one day, it'll also be remembered for smartphones. Or at least that's the hope of Chinese handset maker ZTE, which is using the name as a new company brand.

ZTE's latest Nubia handsets were unveiled on Tuesday, at a time when the company is trying to bring more high-end phones to the market. The flagship device, the Z5S, is a 5-inch smartphone packed with the latest technologies including a Qualcomm Snapdragon 800 processor and 443 pixel-per-inch touchscreen.

The device, along with the smaller Z5S mini, will be available for pre-order in China later this month. But the phones will also appear in foreign markets such as the U.S. and Europe, probably by next year's first quarter, according to the company.

ZTE, while not widely known in the U.S., is one of the largest mobile phone makers in the world. Many of its handsets are sold in its home market of China, but the company's reach also extends to the worldwide marketplace. Last year, it ranked fourth in annual mobile phone shipments behind Apple, according to research firm IDC.

But despite its reach, ZTE has historically taken a business-to-business approach in its handset sales. Some of its devices, while made by the company, are sold as unbranded phones to its mobile carrier customers, giving the vendor little exposure to consumers.

That's starting to change, however, as ZTE works to popularize its smartphone brand in markets such as the U.S. to sell more high-end devices. In addition to promoting the ZTE name, the company last year set up an independently managed team to build a handset division specifically targeted for consumer sales. The Nubia division has been the result, and the team wants to sell premium phones across the globe, but at affordable prices.

"There's no special reason for the name, we actually picked quite a few. But all the better names were registered by others," said Ni Fei, CEO for the division. The team eventually settled on Nubia, liking how it related to early civilizations in Africa and the beginnings of mankind. But another factor taken into account was its pronunciation.

"This word Nubia, when said by people outside of China, it's easy to pronounce," he said. "For example, ZTE or Huawei, when spoken by foreigners, its not as easy. The names don't come out as smoothly."

Having a brand that appeals across geographies is important, given that the company wants to expand outside its home market. In October, ZTE began selling the previous generation of Nubia phones in the S., making them available at, Target and RadioShack.

But selling phones in the US clashes with the company's strategy of using retail channels, rather than mobile operators to reach consumers. It's an approach that works well in China, where customers often buy phones directly from the Internet or physical store without having to sign up for a cellular plan. But not so much in the U.S., when mobile operators control the market with contract phone plans, Ni said.

"In the North American market, we will continue to give it a try," he said. "But in the short-term our volumes won't be very big." Instead, other markets such as Russia and Southeast Asia show better potential for sales, Ni added.

Still, the Nubia division won't ignore the U.S. market given it's size. Once the brand gains more recognition, the team will consider partnering with U.S. mobile carriers, Ni said. It also sees promise in the country's no-contract phone market, which Ni said is rising from the demand for prepaid plans.

"There will be more and more of these no-contract plans and they could really benefit us," he said.

The Nubia Z5S has a Qualcomm Snapdragon 800 2.3 GHz processor, and 2GB of RAM. The screen can display 1080p HD video images, and the phone has a 13-megapixel rear-facing camera that can also shoot 4K video at a resolution of 3840 by 2160 pixels. It weighs 126 grams.

In China, the LTE 32GB version of the device will be priced at 3456 yuan (US$564). A 3G version with 16GB in storage will go for 1999 yuan ($326).

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Michael Kan

IDG News Service
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