Source: SourceSight

ZTE and Doubao: A Unique Connection

Recently, ZTE’s subsidiary, Nubia, launched the NaviX Ultra, dubbed the ‘world’s first AI agent smartphone,’ which emphasizes native AI experiences. Priced at 5,999 yuan (or 5,499 yuan after subsidies), it costs over 2,000 yuan more than its predecessor, the Nubia M153 ‘Doubao Phone,’ positioning itself as a premium offering.

However, as the successor to the once-trending Doubao Phone, the NaviX Ultra appears to be receiving a lukewarm response compared to its predecessor.

Despite Nubia’s claim of ‘sales exceeding 100 million yuan in one second’ after the launch, the ample availability of the product suggests otherwise. Most secondary market prices remain at or below the original price, with major e-commerce platforms like JD.com showing readily available stock. This is in stark contrast to the initial frenzy surrounding the Doubao Phone, the Nubia M153.

Image Source: JD.com

In late 2023, the limited release of the Nubia M153, which featured a preview version of Doubao’s AI assistant technology, sparked a buying craze. Initially priced at just 3,499 yuan, the M153’s prices skyrocketed to tens of thousands of yuan in the secondary market. Its popularity even caused ZTE’s A-share stock to hit its daily limit, with trading volume exceeding 14.6 billion yuan.

The unexpected success of this experimental AI-focused phone became one of ZTE’s few market highlights in recent years. During its annual results briefing in March, ZTE announced plans to strengthen the Nubia brand and pursue an ‘AI phone + gaming phone’ innovation strategy to differentiate itself. Collaborating with ByteDance to develop and launch next-gen AI phones has become a key part of ZTE’s ‘AI for All’ strategy.

01

A Less Impressive Follow-Up

Less than a week after its release, Nubia’s second-gen Doubao Phone has been labeled the ‘ByteDance-exclusive machine’ by early adopters.

According to Nubia, the launch of the NaviX Ultra marks the transition of AI agent phones from engineering prototypes to mass production and commercialization. However, this shift also entails ‘compromises.’ While the new flagship model boasts superior hardware performance, its app operation permissions have become more restricted and conservative.

As a phone promoting native AI experiences, the NaviX Ultra excels in hardware design, featuring a dedicated AI button on the side with integrated fingerprint recognition. This button supports single, double, and long presses to activate different AI functions. Through fingerprint recognition, users can access personalized Doubao AI assistants, offering a direct AI experience.

Image Source: ZTE Mall

Additionally, the new model’s AI functions, built on the Doubao AI assistant, enjoy high access permissions within ByteDance apps like Douyin and Feishu. Tasks such as price comparisons in Douyin’s mall, liking and commenting on videos, and managing work schedules in Feishu documents can largely be handled by AI in the background. AI only seeks user confirmation for sensitive operations like payments and logins.

Overall, in apps with open interfaces, the second-gen Doubao Phone’s AI capabilities nearly replicate manual operations.

However, user feedback indicates varying degrees of usability issues with popular apps like Alipay, WeChat, Meituan, Didi, and Xiaohongshu, primarily due to restricted in-app permissions.

This mirrors the issues faced by the initial Doubao Phone.

The ‘Doubao Phone’ that sparked debate late last year, the Nubia M153 engineering phone, initially implemented AI functions crudely by having AI read screen content and simulate finger taps to control the screen, enabling cross-app task execution. Since this bypassed official app permissions, many developers quickly flagged such operations as high-risk. For instance, WeChat displayed ‘abnormal login environment’ warnings, Alipay showed ‘access denied,’ and several banking apps blocked logins and payments due to ‘risky environments.’

Image Source: Xiaohongshu

In response, Nubia and Doubao promptly imposed operation restrictions and disabled related AI functions, a trend further formalized in the new mass-produced NaviX Ultra.

Specifically, the second-gen Doubao Phone incorporates protocols like MCP (Model Context Protocol) and A2A (AI Agent Interaction), enabling AI capabilities through voluntary app interface openings. Additionally, Doubao introduced the SAEP (Screen Automation Execution Protocol) to encourage broader AI operation interface access.

The SAEP protocol states that during a 30-day notice period, apps can declare permissions to allow or deny specific actions like posting, deleting, or checking in. Besides system, ZTE, ByteDance, and explicitly consenting third-party apps, all others remain closed by default.

Thus, the SAEP protocol offers a conservative yet clear AI interface operation framework, granting more control to third-party apps' willingness to open up. However, current usage suggests that ZTE’s highly anticipated ‘AI agent phone’ essentially revolves around ByteDance and Doubao ecosystems.

02

The ‘Official’ Doubao Phone

From prototype to mass production, Nubia released two ‘Doubao Phones’ within nine months, with pricing jumping from the mid-range 3,499 yuan to a flagship starting price of 5,999 yuan. Yet, beneath the apparent market hype, Nubia’s prospects remain uncertain.

According to Yicai Global, the NaviX Ultra’s total inventory stands at around 200,000 units, with an initial batch of under 100,000. This marks a significant increase from the Nubia M153’s initial batch of roughly 30,000 units but remains negligible in China’s vast smartphone market. For context, over 69 million smartphones shipped domestically in Q1 this year.

Image Source: ZTE

Furthermore, IDC statistics reveal that by 2018, ZTE’s domestic market share, including Nubia, had plummeted to 0.75%. Brands like Sony, Sharp, and Meizu, which ranked below ZTE then, have since faded into obscurity in the Chinese market.

Declining shipments directly erode Nubia’s bargaining power with suppliers. Industry sources cited by media report that due to limited shipments, Nubia’s ability to negotiate with core suppliers like Qualcomm and Sony has weakened. Components like screens, batteries, and image sensors cost 8% to 15% more than those of leading brands, posing severe challenges to its pricing strategy.

Simultaneously, due to changing international dynamics, reduced financial support from ZTE’s parent company forced Nubia to cut R&D investment. Financial reports show Nubia’s R&D expenditure ratio fell from 8.2% to 4.5% between 2018 and 2021. This contraction in research and technology further diminished Nubia’s market competitiveness.

Tianyancha data indicates that Nubia (nubia), founded in 2012 as ZTE’s premium smartphone brand, is co-founded by Ni Fei, ZTE’s Terminal CEO, who also chairs Nubia.

Once a notable player in the photography niche, Nubia has largely disappeared from the mainstream smartphone scene in recent years, with its domestic market share hovering below 1%. It has become a strategic reserve brand for ZTE in the consumer segment, serving as a technological testbed. This laid the groundwork for Nubia’s deep integration with Doubao.

After the ‘Doubao Phone’ Nubia M153 went viral in December last year, the AI phone strategy centered on the ByteDance ecosystem gained significant traction. During its March annual results briefing, ZTE stated that the Doubao AI assistant technology preview on the Nubia M153 propelled cutting-edge AI technologies into practical terminal applications, marking a crucial milestone in AI-native phone development.

Building on this, ZTE announced deepening collaborations with mainstream ecosystem partners like ByteDance to advance next-gen AI phone R&D and launches, reinforcing its ‘AI for All’ strategy. Additionally, ZTE plans to further upgrade system-level AI capabilities, integrating its proprietary Co Claw intelligent scheduling technology for seamless cross-app and cross-ecosystem collaboration. This supports automated task execution in complex scenarios, enhancing user operational efficiency and interaction intelligence.

Evidently, for ZTE Nubia, the partnership with ByteDance’s Doubao has evolved from experimental exploration to comprehensive strategic collaboration. More crucially, for Nubia, increasingly marginalized in the mainstream market, clinging to the Doubao Phone as a lifeline to restore brand visibility and attention may be its best option.

03

ZTE Smartphones Accelerate Transformation

Faced with intensifying competition in the existing smartphone market, ZTE is leveraging the Doubao Phone’s popularity to accelerate a comprehensive transformation of its smartphone business.

According to HuXiu, citing ZTE sources, prior to the second-gen Doubao Phone's release, ZTE’s smartphone business underwent a new round of restructuring. Domestically, the Nubia brand will fully inherit the Doubao Phone business, while the ZTE brand will focus on custom models for telecom operators. Overseas markets will be managed under the Nubia brand, and the RedMagic gaming phone will also be integrated into the Nubia brand system.

This adjustment signals ZTE’s smartphone business will accelerate its shift around the Nubia brand. Indeed, as early as 2025, Nubia launched the nubia Neo series, dubbed ‘young people’s first gaming phone,’ blurring the lines between its original brand and RedMagic’s esports offerings.

According to ZTE, its smartphone business will focus on ‘AI + gaming’ to differentiate from ‘all-rounder’ models, pursuing a unique competitive track from general-purpose phones to AI + gaming. On one hand, it will continue collaborating with ByteDance to create AI-native phone series, establishing Nubia as a pioneer in AI smartphones. Simultaneously, through dual-brand synergy with RedMagic and a complete product matrix covering professional esports and trendy entertainment, it aims to strengthen Nubia’s brand recognition among global young audiences.

However, judging by actual performance, beyond smartphones, ZTE’s consumer business is also accelerating efforts to diversify revenue streams.

ZTE’s 2026 interim report shows consumer business revenue reached 18.629 billion yuan, up 8.09% YoY, with a gross margin of 18.35%, a 0.57 percentage point increase, primarily due to improved margins in home terminals. The consumer business now offers a full-scene AI terminal matrix, including home terminals, smartphones, mobile internet products, and cloud computers.

Source: ZTE 2026 Interim Report

Specifically, ZTE’s home terminal business, including FTTR, home routers, and home cameras, maintains a leading market share in the domestic operator segment. Its smart mid-size screens have become the top brand in the operator market. Internationally, ZTE’s Wi-Fi 7 products are shipping at scale to customers in Europe, Asia, and Latin America, solidifying its global leadership in home terminals.

Cloud computers, a new growth area for ZTE’s consumer business, provide secure, efficient, and intelligent cloud-based office systems for enterprise and government clients, maintaining the top shipment volume in the operator market.

In smartphones, beyond terminals, ZTE is focusing on key countries and large telecom operator markets, continuously expanding channel reach and open market presence, with the 2C business becoming a new revenue growth engine.

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