The Journal suggests that ZTE is working with Mozilla in order to diversify its product range and shift from its reliance on Android and WinPho. ZTE is, apparently, working with "a regional telecom carrier outside of China." It's not exactly clear what that means, but Mozilla has announced tie-ins with Telefonica and Sprint in the past.
The Mozilla phone OS is intended to run an HTML-based platform, but supply the same level of performance as existing mobile operating systems. Other than that, it's anybody's guess how the ZTE handset will turn out. [Wall Street Journal and Reuters]