SMARTPHONES: ZTE Sees Double With New Smartphone

Bottom line: ZTE’s new dual-screen smartphone will turn some heads and raise the company’s profile briefly due to the novelty factor, but the effect will quickly fade due to lack of practical uses.

You can’t blame ’em for trying. That’s the first thing that came to mind when I saw the announcement and some photos of a new foldable ZTE (HKEx: 763; Shenzhen: 000063) smartphone with  two screens. This clearly looks like the company’s attempt to find new relevance in the cutthroat smartphone market, where phones increasingly look and feel the same. The move seems to be part of a recent trend that says “give them more space” on their screen, which others are trying to do by creating phones whose entire face is taken up by the screen.

I’m not really a gadget person, but from a business perspective I do have to credit ZTE for trying to find something new to distinguish itself from the pack. The company was one of China’s earliest success stories in the cellphone and later the smartphone space. But a big portion of its products still go to US wireless carriers who stamp their own brand on the phones and give little or no space to their Chinese supplier.

All that said, let’s take a closer look at this new model, called the Axon M, and whether it has the potential to breathe some new life into ZTE’s sputtering smartphone business, which is barely a top 10 global players. The model’s most outstanding feature is, of course, its twin screens, which can fold up into a single-sized phone, albeit a bulky one. (company announcement)

The idea behind the two screens is that you can run a single app on them and get twice as large an image as a single screen. That might be good for gamers or people who like to do a lot of reading on their phones. But I’ve heard the same thing said of tablets, and it seems that people ultimately prefer to do their reading and gaming on specialty devices or just their regular smartphones rather than these specialty larger models. You can also run two separate apps at the same time, one per screen, though I honestly can’t think of too many instances where I’ve wanted to do something like that.

Carried by Carriers

As with many of its other models, the phone will initially be available through ZTE’s carrier partners, in this case through AT&T in the U.S. and later through other carriers globally. There are no prices, but the monthly package figure for the AT&T model implies a price of about $700, which certainly isn’t cheap but also isn’t too outrageous considering costs are higher due to the two screens.

The reviews for the phone are pretty mixed, though it’s worth noting that they appear to be based on some really quick impressions since reviewers weren’t given that much time with the models. Most of them note how clunky the design is, since these new phones are twice as thick as existing single screen models. There’s obviously a certain amount of fascination with the double-screen design, but that novelty factor could quickly fade.

I had my own similar experience with a Lenovo (HKEx: 992) Yoga computer, which is similar in that it can be a laptop and also fold all the way back on itself to become a bulky tablet computer with a touch screen.  Needless to say, the novelty factor quickly wore off and I rarely used the tablet PC functions after a few months. If I had to choose again, I would ditch this particular design, which never really caught on.

One of my contacts who follows these things more closely concurred that the dual screens, while not a first, should at least turn some heads in the beginning. ZTE also has strong partners in the US especially, where it’s actually a top 5 player due to its carrier relationships. But at the end of the day, I doubt this new design will have legs, mostly because of its bulky design and the fact that people will quickly tire of its awkward fold-out design and see no reason for running two apps at a time. Accordingly, it’s unlikely to do much to revive ZTE’s smartphone business.