Black Friday Watch: iPhone Rival ZTE Is Building A Cyber Phone For The Chinese Government

Black Friday is a few days away and one of the special deals being offered by Walmart is the "Walmart Family Mobile ZTE Zmax Smartphone". Sounds all warm and fuzzy... Mom, Dad and the kids can sign up for a plan from America's hometown  apple pie retailer and everyone gets a new Android phone for taking pictures, texting, surfing the web, and downloading their favorite apps.

ZTE  is a major player in the global smart phone market. They provide cheap phones that appeal to cost-conscious U.S. consumers who can't afford or don't want to spend more for premium brands such as Apple and Google . ZTE claimed about 8% of America's smart phone market in the second quarter of 2015 - which was up from 4.2% in the first quarter of 2014, according to researcher IDC. That makes ZTE the number four smart phone supplier in the U.S., after Apple, Samsung and LG.

There's an entire lineup of ZTE smart phones available from Walmart, Best Buy , and other U.S. big box retailers and electronics chains. Black Friday is a few days away, and you can bet that ZTE is expecting to cash-in on the droves of shoppers who will hit the brick-and-mortar and online stores with credit cards in hand.

If you fancy yourself an educated consumer and would like to know who you're buying from, there's a few things you should know about ZTE Corporation.

ZTE is China's largest listed telecommunications equipment company. They are headquartered in Shenzhen, China. ZTE USA, headquartered in Richardson, Texas, is a subsidiary of ZTE Corporation, and they are ranked by independent industry analysts as the fourth-largest supplier of mobile devices in the U.S. overall, and the second-largest supplier of prepaid devices.

The Wall Street Journal reported yesterday that ZTE Corp. is working in collaboration with Chinese e-Commerce company Alibaba Group Holding Ltd., China’s largest chip-design company Spreadtrum Communications Inc., and China’s ministry of public security on a secure phone for Chinese government agencies. The phone will use its own homegrown operating system -- and ship with no camera, GPS, Wi-Fi or Bluetooth wireless connections -- to minimize security risks.

It is widely reported that the Chinese government is sponsoring efforts to build up its domestic tech industry - and to cut out U.S. tech companies wherever possible.

At first blush it may not seem like ZTE's secure phone poses much of a threat to U.S. phone makers. With no camera or Wi-Fi, it's hard to imagine the phone appealing to the general consumer market in China. But who knows where ZTE goes with the phone after it is delivered to Chinese government agencies.

China is the world's largest smart phone market. Almost all mobile phones are Apple iPhones or Google powered Android phones. If China is determined to cut out U.S. tech suppliers - then you have to wonder if ZTE's new phone could wind up becoming the 'official' Chinese government sponsored phone down the line. If they add in a camera and Wi-Fi - plus a secure operating system - then it could have mass market appeal.

ZTE is a friendly partner with Google and they use the Android operating system on their Zmax phones for sale at Walmart and other major U.S. retailers. When you buy a ZTE phone, some of that revenue goes to Google - so it is not an entirely Chinese made phone. ZTE USA has signed a sponsorship deal with the NBA champion Golden State Warriors, and other NBA teams including the nearby Houston Rockets.

Now you know more about ZTE if you are thinking about buying one of their smart phones on Black Friday.