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As All-Star point guard Stephen Curry drained three-pointers during warm-ups, ZTE U.S. head Lixin Cheng looks on, hoping that his bet on the Golden State Warriors and the National Basketball Association will pay off.
The Chinese phone maker has poured a significant chunk of its U.S. marketing budget into sponsoring three NBA teams.
It’s certainly not uncommon for tech companies to sponsor sports teams as part of their effort to promote themselves and cozy up to would-be consumers. But while ZTE tripled its US marketing budget this year, Cheng acknowledges the company lacks the big bucks of its bigger rivals like Samsung and Apple who can afford lots of TV ads and billboards.
“We don’t have the same deep pockets as some of the competitors, (but) we would like to break the vicious circle of burning consumers money to make them pay more for the same,” Cheng said.
Still, some effort to boost its name is needed, Cheng said, so that customers know ZTE is out there. ZTE began last season by sponsoring the Houston Rockets, the hometown team of ZTE’s U.S. operations. This year they added sponsorships in two other big markets: San Francisco’s Golden State Warriors and the New York Knicks.
As for the success, it’s somewhat hard to measure. ZTE has made market share gains in the U.S. over the last few years. It currently has about six percent of the U.S. market, putting it fourth behind Apple, Samsung and LG.
However, its gains have mostly been at the low end of the market, areas where price and features trump brand recognition.
Cheng said the Rockets sponsorship — along with an increase in market share — helped the company’s brand awareness go from one percent to 16 percent. That’s an improvement, but well below what Curry shoots from the three-point line and, more importantly, far below what ZTE needs to become a household name.
But standing out from the pack is a challenge for both ZTE and fellow Chinese phone maker Huawei.
“Their brands aren’t big, so the big carriers won’t carry their phones on postpaid under their own brands, which prevents them from getting in front of lots of customers, and so on,” says Jackdaw Research analyst Jan Dawson. “Both companies have now invested heavily in direct-to-consumer marketing like Huawei’s partnership with the Jonas Brothers and now ZTE’s basketball sponsorships. It’s an attempt to do an end-run around the carriers and reach consumers directly, to try to force the carriers’ hands into carrying their devices. I’m skeptical that it’ll work, but these guys have been trying for years to break into the US in a big way, and their market share is going to stay small if they can’t get onto the big postpaid services with their own brands.”
Even at the Warriors game highlighting the company’s partnership, ZTE was just one name among money. Oracle was the only name painted on the floor, while ZTE did get its logo under the baskets, but alongside that of Warriors’ official car Kia and team broadcaster Comcast SportsNet.
Probably the best branding moment of the game came during the ZTE-sponsored Season Ticket holder of the game promotion, with the crowd hearing a few details on the combination hotspot/projector awarded to the fan. Its name also appeared on the inflatable noisemaking sticks handed out to fans.
ZTE used Tuesday’s Warriors game to unveil its new tagline — Tomorrow Never Waits — and also took part in a drive encouraging fans to donate a new or used smartphone to underprivileged youth in the area.
As for why basketball, Cheng notes that basketball is big in China and parent company ZTE has a broader partnership with the league in China.
“China has a lot of NBA fans,” Cheng said. Warriors marketing chief Chip Bowers notes that basketball has the biggest global fan base of the four major sports leagues and says NBA fans tend to be early adopters of technology.
Cheng says he is a pretty big basketball fan, though he doesn’t make it to that many games. Traveling so much, he says he has an NBA League Pass subscription, using his company’s combination Wi-Fi hotspot and projector to watch the games while on the road.
And, shooting off one last ball before the buzzer, Cheng noted that a second generation of that product is coming at next week’s CES in Las Vegas.
This article originally appeared on Recode.net.
