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ZTE shares fall 17% following bleak profit warnings

Following a warning that their half year profits could drop by up to 80%, shares in Chinese manufacturer, ZTE, dropped by 17% to a 3-year low. 

The news continues a run of bad press for ZTE in recent weeks, with reports emerging that allege an FBI investigation also hangs over them amid investigations around the sale of banned equipment to Iran. 

ZTE, like fellow Chinese OEM Huawei, is trying to break into the western market with their latest range of Android devices. Indeed, this week we're promised the unveiling of an 'advanced gaming smartphone' at an event being held in London. Given the bleak financial outlook, an game-centric device may not be the way to turn things around, but on that front we'll just have to wait and see. 

Source: BBC News

  • With a staggeringly huge China market right on their door step, one wonders why these two companies are trying so hard to get into the US market. One also wonders if they aren't engaging in dumping (selling virtually at cost or below cost) if they have not been able to enter the north american market at a profit. Even Australia does not trust Huawei due to their close ties to the Chinese military. There was a big story on IBT about the security back doors these two firms alegedly have. Using equipment supplied by Chinese electronics giants Huawei Technologies and ZTE corporation, the People's Liberation Army and the government have "back door" access to a vast majority of the world's electronic information, including sensitive military and intelligence data, Michael Maloof claims. Note that this story refers to carrier grade equipment, not your average cell phone.
  • Do US carriers not bend over to US govt *cough* *cough*. If you want to bring up shady tariffs and what not, look up "chicken tax" for trucks. I'm not defending them in any way. I just want to point out that no government is a saint here.
  • I want that live wallpaper. Badly.
  • ZTE males little low end phones. They are going down the same dead end HTC was caught in.
  • dup.
  • These smaller companies need to take a risk and put out a high end vanilla Android device.
  • this means "small"? dayum. I want to run a small business like them.
  • Vanilla Android appeals to the us. Doesn't necessarily mean it appeals to the mass market, ie the majority of people who buy smartphones.
  • Samsung really should sue them for that design . . . .
  • They probably don't have a patent for it. Apple seems to be the only company smart enough to game the system.
  • Ouch!