In Depth: ByteDance Riles Smartphone Ecosystem With AI Pitch

[para. 1] The launch of ByteDance's prototype smartphone, the Nubia M153—in collaboration with ZTE—has caused significant disruption in China’s smartphone market. This device comes preinstalled with Doubao, ByteDance’s AI-powered assistant, raising substantial concerns around data privacy and security due to its deep integration with the phone’s operating system. [para. 2] Demonstration videos highlighted Doubao’s advanced capabilities to navigate and operate tasks across multiple leading apps, including not just ByteDance’s own platforms, but also prominent e-commerce, lifestyle, and travel services. Functions included cross-platform product comparisons and restaurant booking, showcasing a leap in practical AI assistant use.

[para. 3] The Nubia M153, priced at 3,499 yuan (around $500), sold out immediately after release despite indications from ByteDance and ZTE that it was a limited production with no certainty of further releases. The anticipation and excitement prompted a surge in ZTE’s share value, hitting the daily trading limit. [para. 4][para. 5] Yet, this momentum quickly met resistance from rival platforms. Some users were soon unable to log into WeChat while using the Nubia phone, with Tencent—despite denial of direct action—appearing to restrict access. The scope of the blockade expanded to apps run by Alibaba and Tencent, including Taobao, Alipay, and Honor of Kings.

[para. 6][para. 7][para. 8] ByteDance responded by disabling Doubao’s ability to operate WeChat and later limited its functions on financial and gaming apps, citing security and fairness. App developers criticized ByteDance for allowing Doubao to operate at the system level, threatening the prevailing app-centric business model where user engagement within individual apps drives monetization. The broader context is intense competition among both smartphone-makers and app developers to control AI-driven user experiences and device ecosystems. A source noted Doubao now competes simultaneously against both leading phone manufacturers and the country’s dominant "super apps".

[para. 9][para. 10][para. 11] ByteDance’s move aligns with a wider surge in embedded AI assistants on smartphones. According to QuestMobile, the user base for AI assistants from the top six Chinese smartphone makers reached 535 million by September 2025—an increase of 65 million in a year—dwarfing standalone AI apps, which have 287 million users. ZTE’s leadership positioned the Nubia M153 as an “open” innovation akin to pairing iPhone with ChatGPT or Samsung with Google’s Gemini. The AI phone project originated within Doubao’s team, with ZTE acting mainly in manufacturing.

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[para. 15][para. 16][para. 17][para. 18] The backlash, however, is rooted in longstanding tensions over platform control and user data. Tencent has a history of taking strong measures against threats to WeChat’s ecosystem. For example, in 2017, Tencent reported Huawei’s AI features to regulators, and in 2020, blocked links from Alibaba’s DingTalk and ByteDance’s Feishu, citing privacy threats. ByteDance argues that Doubao only acts on explicit user commands and does not operate autonomously, but the perception of risk persists.

[para. 19][para. 20][para. 21][para. 22][para. 23] For ZTE—whose smartphone market share fell to 1.5% in 2019—AI smartphones represent a chance for revival. Despite ByteDance seeking partnerships with various phone-makers, most declined to offer the deep system access Doubao requires, due both to competitive concerns and data security. Many leading manufacturers prefer to build their own LLM-powered features and are cautious about integrating external providers at a system level.

[para. 24][para. 25][para. 26][para. 27] Smaller, specialized companies like StepFun have gained ground, providing flexible AI solutions to handset makers wary of empowering larger potential competitors. The market remains fluid, with no consensus on standard practices or model providers. ByteDance’s disruptive entry—though controversial—may ultimately drive broader innovation across the smartphone AI ecosystem.