ZTE Smartphone Business Sale Report Is False, Company Says

ZTE has denied a report that it plans to move its ZTE smartphone business into a new joint venture valued at about 40 billion yuan ($5.6 billion). The Chinese telecom equipment maker said on the evening of Tuesday, November 3, that the story was “seriously inconsistent with the facts” and that it reserves the right to take legal action over its spread.

The denial came within hours of the rumor going viral in China. ZTE gave the statement to The Paper, a Shanghai news site.

On Wednesday morning, ZTE repeated the denial to business outlet Yicai, calling the joint venture rumor groundless.

What the ZTE Smartphone Business Report Claimed

According to the original report, which cited people familiar with the talks, ZTE was negotiating with a large Chinese internet company and Shanghai state-owned investors to set up a jointly owned company for its consumer phones. As Gizmochina summarized, the internet company was said to be ready to invest about 8 billion yuan ($1.1 billion), while ZTE wanted the unit valued at around 40 billion yuan.

The report claimed talks began in April 2026, sped up in July and reached broad agreement in September, with an announcement planned for late October that never came. The new company would have covered ZTE-branded phones in China and abroad. Routers and home terminals would have returned to the parent company, and the RedMagic gaming phone line, which just launched the RedMagic 12 Pro globally at $949, would have stayed out of the deal.

Part of the speculation rested on a real company filing. In April 2025, ZTE set up a wholly owned subsidiary in Shanghai, Shanghai Shenqi Jiyuan Intelligent Terminal, which some observers linked to a possible restructuring. ZTE has not tied that subsidiary to any sale or partnership.

How Big Is ZTE’s Consumer Business?

Phones are a modest but meaningful part of ZTE. In the first half of 2026, its consumer business brought in 18.6 billion yuan (about $2.6 billion), or 23.88% of total revenue, with an 18.35% gross margin, according to the company’s interim report figures cited by The Paper. That figure also includes home terminals and mobile broadband devices, not only smartphones.

ZTE has been betting on AI to make its phones stand out. Its Nubia brand, which previously showed what it called the first AI agent smartphone, released the Nubia NaviX Ultra in September with ByteDance’s Doubao assistant built into the system.

What It Means for ZTE Phone Buyers

For now, nothing changes. ZTE, Nubia and RedMagic phones remain part of the same company, and ZTE has announced no new structure for its handset unit. Smaller Android brands are still under pressure, though, as rising memory prices squeeze margins across the industry. ZTE shares closed almost flat at 27.65 yuan on Tuesday, before the denial was published.