The Chinese are coming!

ORLANDO, Fla.-The competitive cauldron that is the domestic Chinese handset market has produced a few winners. And that has fueled a desire among those winners to enter the U.S. market.
The prize? Prestige, profits and brand-building that could serve long-term, global growth, according to analysts.
At least two of those Chinese vendors-ZTE USA Inc. and Alcatel Mobile Phones, owned by the industrial conglomerate TCL Corp.-have arrived on American shores bearing handsets and grand ambitions.
“Grand ambitions” in this context might well translate to a couple SKUs (stock keeping units) at a tier-one carrier, maybe a handful of SKUs at a handful of tier-two carriers. (ZTE, for instance, has also scored WiMAX business with Sprint Nextel Corp.)
For carriers, the Chinese handset vendors may provide a source of low-cost phones, giving them leverage with larger, better-branded vendors for better deals.
“We’re in the handset business in a serious way,” said Lance Cornish, vice president for marketing and business development at ZTE, based in Richardson, Texas. “But we’re being realistic on our aspirations. We’ve been talking to the carriers here for a year.”
Cornish joined ZTE USA after nearly a decade with Nokia Networks in the U.S. and he acknowledged that his task is difficult, but argued that it is do-able.
“We know that you don’t just knock on a tier-one’s door and start doing business,” he said.
Bill Morelli, analyst with IMS Research, said that Motorola Inc.’s travails offer an opportunity to small, nimble competitors-if they can offer compelling designs and a feature set them apart from the crowd.
“Getting into the U.S. market is about getting press and building brand,” Morelli said. “The U.S. is a well-watched, competitive market. And building brand is part of a global business strategy.”
“They all want to be the next Nokia or Motorola,” Morelli added. “So they’re defining their identity.”
If Cornish has his way, ZTE USA will make its reputation as the manufacturer of well-designed, well-featured handsets, he said.
At CTIA Wireless 2007, ZTE USA announced its first products intended for American tastes-CDMA2000 1x EV-DO handsets with Digit Wireless’ Fastap keypad referred to as the D Series.
Alcatel Mobile Phones by TCL Communications are available in 80 countries, according to the company. TCL has rights to the Alcatel name for handset products and its differentiator will be on style. Its global portfolio of 20 handsets, now sold elsewhere, will be augmented by an additional 15 models this year. Right now, U.S. carriers are testing the phones; as with ZTE USA, a business win is not yet assured.
At CTIA Wireless 2007, the company staged a mock fashion show complete with catwalk and the usual bevy of beauties. The message seemed to be: our phones are fashion hotties, a gambit which drew crowds, though it will decidedly take more to convince U.S. carriers and their customers that beauty is more than skin deep.
“It’ll come down to the quality of the handset,” Morelli said. “And that perception of quality by consumers may depend on the carrier and their coverage.”