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October 19, 2015

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ZTE sees bright future for on-board diagnostics

By Zhu Shenshen | October 19, 2015, Monday | Print Edition

The move by ZTE Corp, China’s biggest public telecommunications equipment maker, into the on-board diagnostics market is another sign of the convergence of information technology and the automotive industry.

On-board diagnostics, called OBD in industry jargon, refers to a vehicle’s self-diagnostic and reporting capability, using a digital communications port to provide real-time data to the vehicle owner and repair technicians.

These systems provide rapid identification of malfunctions and identify remedies. They are also integral to future technologies, such as cars that drive themselves.

“It’s the right time for ZTE to enter the OBD market,” said Yang Lei, an assistant to the chief executive of ZTEWelink, a telematics subsidiary of Shenzhen-listed ZTE.

ZTEWelink is expected to generate global revenue of 500 million yuan (US$78.1 million) this year, mainly from Europe and North America. In 2016, the company expects revenue to double, Yang told Shanghai Daily in his office in the Zhangjiang Industrial Park in Shanghai.

ZTE said its strong overseas expansion experience and its close relationship with telecommunications carriers like China Mobile, AT&T and Verizon, give ZTE a commercial edge.

China has great potential for on-board diagnostics, thanks to growing demand for smarter vehicles. But it’s also a highly competitive market, with more than 10,000 OBD device vendors vying for customers.

The quality of network connection and hardware manufacture is a key competitive factor, Yang said.

“We are in such a ‘connected world’ now,” he added.

Indeed, there are even 4G base stations in the villages in China, built by carriers as China Mobile and China Unicom. The wireless connection renders ZTEWelink different from rivals because the Shenzhen company is one of the two major suppliers to carriers.

“Users trust the response speed and wireless network connections in our products,” Yang said. “They are totally different from devices made by unknown factories.”

China’s Internet Plus strategy and the expansion of dot-com giants into location systems and maps are also reconfiguring the on-board diagnostics market. Both require fast and stage network connections.

Aside from its telecom equipment, ZTE is on track to achieve sales of 60 million smartphones globally this year.

That brings ZTEWelink manufactur-ing advantages in batteries, chips and network connections, Yang added.

At present, the company is forging commercial ties with domestic car makers like SAIC and Geely to offer integrated on-board diagnostic devices.

The development of self-driving cars is still in its infancy but holds great promise for the future, said Yang.

“Before that happens, we have to stick to basics and do our best to provide the top-quality products,” he said. “That’s our present goal.”

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