Another Blow For Beleaguered ZTE 中兴通讯：挫折连连

It seems the folks at ZTE (HKEx: 763; Shenzhen: 000063) just can’t catch a break these days. After suffering setbacks in North America, where it failed to get a key contract from Sprint (previous post), and in India, where its country head recently resigned (previous post), ZTE is now being sued in Europe by industry heavyweight Ericsson (Stockholm: ERICb) for intellectual property theft. (English article; Chinese article) This move by Ericsson hits ZTE right where it really hurts, as Europe was one of its last major markets where it was still doing well. This latest lawsuit could make potential customers there hesitate before signing any new orders, dealing another blow to its business. I had already flagged 2011 as a year when ZTE could see its growth slow sharply, and this latest development further cements that view. If things keep going this way, we could actually see their overseas new orders shrink in 2011.

Bottom line: Ericsson’s new lawsuit marks the latest bad news for former telecoms superstar ZTE, further denting its already-weak prospects for 2011.

中兴通讯<0763.HK><000063.SZ>真是走了霉运。它相继在北美和印度市场市场失利,未能赢得Sprint电信建 设4G网络的关键订单，而且印度分部总裁辞职，现在又欧洲遭到行业大佬爱立信<ERICb.ST>就知识产权问题起诉。爱立信这场官司打到了中兴的痛处–这是后者目前仅有的运营情况良好的市场之一。中兴的欧洲客户在签下任何新订单之前可要三思了。我此前说过，2011年可能是中兴业绩大幅放缓之年，到目前看恐怕是逐步应验。如果这种趋势继续下去，中兴的海外新业务甚至可能在今年发生萎缩。

一句话：爱立信发难给中兴通讯雪上加霜，令后者在2011年的前景越发堪忧。