China's ZTE has set itself the daunting target of becoming on of the world's top five mobile phone vendors within the next three years. The company is currently ranked 6th in the world. ZTE's vice-president of handset marketing Xiong Hui said that the company aims to increase handset production by 60% next year to reach 80 million units.

 Mr Xiong told the South China Morning Post that ZTE's target for 2010 was 100 million units which should push the company to No5 in the world.

"We want to be a first-tier phonemaker as soon as possible," Mr Xiong said. "But the target could be achieved sooner if our competitors lost market share faster."

However, the company faces strong competition from local rival, China's Huawei which is also aiming to double its handset production as it seeks to catch up with ZTE, which is currently China's largest single mobile phone manufacturer.

Huawei has set itself a target of selling 50 million units next year and has the probable benefit of a large capital injection of up to $2 billion when a portion of the company is sold to private investors within the next few months.

Huawei is the market leader in supplying 3G USB dongles and ZTE says that it wishes to target that market, which Mr Xiong said offered higher gross profit margins.

"We are the world's second-largest vendor for 3G data products with shipments of 4 million units in the first half," said Mr Xiong. "3G products should have a better gross profit margin and we are in direct competition with Huawei in overseas markets."

Source: South China Morning Post