With ZTE in Trouble, Coolpad Sees an Opportunity

Ten percent of the US mobile phone market is up for grabs right now, and Coolpad is making a bid for it.

The 27-year-old Chinese mobile phone firm has been poking around the low end of the US phone market for several years now. It's finding that with ZTE on the outs, US carriers have really come knocking.

"The recent development with ZTE doesn't change our core strategy. It accelerates the timeline. There are more carriers coming to us … and we're seeing a much more rapid acceleration of the Coolpad business," Coolpad SVP Charlie Parke said. "We have products in the works with a number of tier-1 carriers."

The company's lineup—currently at MetroPCS, T-Mobile, and Cricket—fits pretty neatly into the budget Android space that ZTE occupies. Parke said inexpensive phablets, a ZTE mainstay in the US, will be "one of the primary focuses" for Coolpad's portfolio this year.

Like ZTE, Coolpad uses processors from San Diego's Qualcomm, and it's ready to make phones for all four major US carriers. The company also has a philosophy of leaving Android alone, Parke says, and delivering a Google-like experience. While it hasn't been accepted into the Android One program, Coolpad is looking into using Android Go for its lower-end devices, he said.

"You don't see Coolpad bringing any Coolpad-centric layers on the Android experience," Parke said.

But that doesn't mean Coolpad's smartphones will get a lot of Android version upgrades. Security updates come on a monthly basis, but feature updates tend to weigh down "memory constrained" low-end phones, Parke said.

Coolpad has two major advantages over ZTE in a tough political climate for Chinese phone makers in the US. It doesn't have an infrastructure business, and infrastructure is what got both Huawei and ZTE in trouble. It also doesn't have major government ownership: its major shareholder is a group run by Chen Hua, a billionaire property developer in Shenzhen.

The saga between the US government and ZTE, which is currently banned from using US components, has been changing on a daily basis; most recently, the Trump administration said it has a deal to bring the phone-maker back. Even if ZTE returns, though, wireless carriers may be skittish, opening up opportunities for competitors like Coolpad.

Cooler Devices That Aren't Pads

The company has ambitions to go beyond phones, too. Children's wearables, asset trackers, and pet trackers could be coming to the US, with a children's wearable device possibly arriving here by the end of the year. At the moment, that space in the US is dominated by LG's GizmoGadget and GizmoPal at Verizon, leaving room for alternatives at other carriers.

"If you look at the China market, kids' wearables are quite dominant and there are numerous offerings. That has not translated into other markets at this point," Parke said.

This dovetails with what Coolpad told us at Mobile World Congress in March. At the time, the company said it was going to build Qualcomm Snapdragon 2100-based watches with voice-over-LTE, real-time tracking, and geofencing.

ZTE has played a role in those kinds of businesses in the US in the past, too: Sprint carried both ZTE hotspots and a ZTE kids' phone, the WeGo.

5G will enable new kinds of connected-device businesses, and Coolpad sees an opportunity there. "The market has yet even to be touched," Parke said.

This article originally appeared on PCMag.com.