ZTE considers selling smartphone division for $5.6 billion

ZTE is currently considering a large-scale restructuring of its mobile business by transferring its consumer smartphone division into a joint venture. The project involves a major Chinese internet company and state-backed investors from Shanghai.

• The preliminary valuation of the new business is 40 billion yuan (about $5.6 billion);
• The potential partner is reportedly ready to invest around 8 billion yuan ($1.1 billion);
• The RedMagic gaming brand is excluded from the deal and will remain unaffected.

Details of the ZTE Restructuring Plan Discussions regarding this project began back in April 2026, with negotiations intensifying significantly by July. By September, the parties had reportedly agreed on the core principles of cooperation and initially planned to announce the agreement by the end of October, though official publication was delayed.

Impact on RedMagic and Market Operations An important highlight of the potential restructuring is that it specifically targets ZTE's consumer smartphone unit, which operates both domestically in China and internationally. Meanwhile, the specialized gaming brand RedMagic will not be part of the deal and will continue its operations independently.

Future Outlook and Ongoing Negotiations Since talks are still ongoing, the final asset valuation, share distribution, and overall structure of the joint venture remain undetermined. This strategic shift reflects ZTE's efforts to optimize its mobile portfolio amid intense global and domestic market competition.