ByteDance riles smartphone ecosystem with AI pitch

(By Caixin journalists Guan Cong, Liu Peilin and Wang Xintong)

The launch of a prototype smartphone running an artificial intelligence (AI) assistant from ByteDance Ltd. has sent shockwaves through China’s handset market, triggering concerns over data privacy and security when AI is given access to a phone’s operating system.

ByteDance launched the Nubia M153, co-developed with the brand’s owner ZTE Corp. on 1 December preinstalled with its Doubao phone assistant — powered by its namesake large language model (LLM). An official demonstration video showcased the assistant navigating rival platforms, executing multistep tasks such as comparing product prices across different e-commerce apps and booking restaurant reservations. Beyond ByteDance’s own platforms Douyin and Feishu, the assistant was able to operate major e-commerce platforms Taobao, JD.com and Pinduoduo; lifestyle services Dianping and Xiaohongshu; and online travel platform Trip.com.

The 3,499-RMB (nearly US$500) model sold out on the day of its release. Despite both ByteDance and ZTE stating the phone would have a limited run with no guarantee that it would be continued, investors responded enthusiastically, trading ZTE’s shares up to the daily limit.

But the backlash from rival platforms was swift. Within two days, some Nubia phone users found themselves unable to log into WeChat; Tencent Holdings Ltd. appeared to have blocked access to its ubiquitous messaging app, although it denied doing so. The digital blockade soon widened. Reports indicated that more apps, including Alibaba Group Holding Ltd.’s Taobao and Alipay, as well as Tencent’s hit game Honor of Kings, were barring Nubia phone users or imposing other restrictions.

ByteDance retreated quickly. On 3 December, the Doubao team announced that the AI assistant would no longer be able to operate WeChat. Two days later, it curtailed the assistant’s functions within financial and gaming apps, citing fairness and security concerns.

App developers signalled that ByteDance had gone too far by seeking to control the phone’s operating system, allowing its AI assistant to complete tasks on users’ behalf. Such system-level control could reduce how often users open individual apps, directly challenging the traditional app-based business model that relies on users actively opening apps to access services.

At the same time, ByteDance found itself competing head-on with smartphone makers, which are racing to upgrade their operating systems with more personalised, efficient and AI-driven user experiences amid intensifying competition.

“Doubao is now standing in opposition to both the top five phone manufacturers and the top three super apps at the same time,” a source at a Chinese smartphone maker told Caixin.

ByteDance’s foray comes as AI assistants embedded in smartphones gain traction far faster than standalone AI apps.

Over the year through September 2025, the combined user base of AI assistants from China’s top six smartphone makers grew by 65 million to 535 million users — nearly double the 287 million users of AI apps developed by tech firms, according to research firm Quest Mobile.

“In this era of sweeping AI transformation, the development of AI phones is irreversible. Our answer is openness,” Ni Fei, president of ZTE’s Nubia Technology Co. Ltd., said in a 9 December post on Chinese social media platform Weibo.

He said the smartphone industry had gone too long without disruptive innovation, comparing the ZTE-Doubao partnership to combinations such as “iPhone + ChatGPT” and “Samsung + Gemini”.

According to a person familiar with ByteDance, the AI phone project was incubated internally by Doubao’s team and launched in 2024, with ZTE playing a role closer to that of an original design manufacturer.

Doubao chose smartphones as its entry point because they provide a natural channel to increase how frequently users interact with its AI services and to rapidly expand its user base, the person said.

The chatbot already commands a strong market position, ranking as China’s No. 1 native AI app in September, with 172 million monthly active users, followed by DeepSeek with 145 million and Tencent’s Yuanbao with nearly 32.9 million, QuestMobile data showed.

The new AI phone assistant offers “full-scenario” capabilities, handling a wider range of tasks with greater precision than competing products, bringing it closer to a true “intelligent assistant”, said Peng Gen, general manager of Beijing-based information security firm Han Hua Xin An. He attributed the advantage to the strength of the Doubao LLM.

For example, when Doubao is used to photograph and solve a problem, the model can reason directly from what it sees, rather than splitting tasks across separate models, said an executive at Volcano Engine, ByteDance’s cloud computing unit.

ByteDance’s attempt to enter the AI smartphone market is stepping on some well-established toes.

On 3 December, some Nubia M153 users reported receiving pop-up warnings when attempting to log into WeChat, flagging “abnormal” login behaviour and prompting them to switch devices. While WeChat later denied taking targeted action, saying it could not determine whether users had triggered risk controls, the Doubao team removed its WeChat-operating function that night.

With nearly 1.4 billion users, WeChat is widely regarded as China’s most mature closed mobile ecosystem. Beyond messaging, it integrates content distribution and generates revenue through advertising, e-commerce and payments. Tencent maintains strict risk controls over the app and has historically taken a hard line against perceived threats.

In 2017, when Huawei Technologies Co. Ltd.’s Honor Magic phone introduced an AI feature that could make restaurant recommendations based on a user’s WeChat conversations, Tencent reported Huawei to regulators, citing privacy violations. In 2020, it blocked links from Alibaba’s DingTalk and ByteDance’s Feishu, saying the apps had posed “a threat to the privacy and security of WeChat users”.

But the Doubao team believe people have misunderstood how the AI assistant works, said a person familiar with the team. Much of the concern centres on the assistant’s permission to access Android’s system, allowing it to simulate user inputs and operate apps on a user’s behalf.

But granting permission does not enable autonomous behaviour, the person said, stressing that the assistant can only operate certain apps after receiving explicit instructions from users.

ZTE is betting that AI smartphones can help it regain relevance after years of declining market share. Once one of China’s “Big Four” domestic phone makers, ZTE has slipped from the top ranks. As of the third quarter of 2019, it held just 1.5% of China’s 5G smartphone market and has not appeared among leading vendors since, according to research firm IDC.

A ZTE representative said apart from ByteDance, Nubia has received partnership proposals from other LLM developers and is pursuing those collaborations.

Before partnering with ZTE, ByteDance approached nearly all top-tier smartphone manufacturers, but most were reluctant to grant Doubao the system-level access to features such as the camera and fingerprint sensor that it needs to function properly, an executive at a leading domestic handset maker told Caixin.

Bringing ByteDance into the system layer would disrupt existing cooperation models and raise new challenges around data security and coordination, the executive said. Traditionally, phone makers work directly with app developers to launch new products. Introducing a powerful intermediary complicates control.

“It’s like autonomous driving,” he said. “Automakers work directly with smart-driving firms. If a third party comes in the middle saying they also want to control the steering wheel and brakes, how do you coordinate?”

In addition, leading smartphone manufacturers have all built their own AI capabilities, so they do not rely on model providers like ByteDance, an industry insider told Caixin. “Doubao’s model is relatively strong, but major phone makers have achieved similar functions,” the insider said, noting that the challenge ByteDance and ZTE face is persuading other ecosystem players to lower their guard.

“The GUI (graphical user interface) interaction method that Doubao is promoting is not what OPPO considers the interaction method for the native AI era, so we prefer to do it ourselves,” said Jiang Yuchen, director of smart product research and development for smartphone maker OPPO Co. Ltd.’s ColorOS operating system. She added that OPPO remains open to working with other companies on LLMs, noting that for AI smartphones, both hardware and software are equally critical to the user experience.

OPPO is among the phone makers doubling down on AI to enhance their operating systems. In October, alongside the release of ColorOS 16, the company unveiled a new AI strategy aimed at strengthening on-device intelligence, including computing power, contextual understanding and memory capabilities. It also upgraded system-level permission management to address the privacy protections required by AI-powered features.

While ByteDance has advantages in collecting and processing vast amounts of data — capabilities that can significantly accelerate model development — smartphone manufacturers tend to be wary of app developers, particularly large ones that could become direct competitors, said an employee at a model developer that partners with phone makers. That caution has instead created openings for startups such as StepFun.

StepFun provides LLM solutions for phones from Honor, OPPO and ZTE. Li Jing, a vice-president at the startup, told Caixin that its model now runs locally on several million handsets and handles tens of millions of cloud-based requests each day, a twentyfold increase since the beginning of 2025.

With solutions from different providers evolving rapidly, the industry is far from a stage where it can commit to a single model supplier, said the executive at a leading domestic handset maker. “There is no settled approach yet,” he said. “We still need to cooperate and experiment with multiple models.”

While controversial, ByteDance’s entry into the field could help accelerate progress across the broader ecosystem, said the model developer employee.

Qin Min contributed to this story.

This article was first published by Caixin Global as “In Depth: ByteDance Riles Smartphone Ecosystem With AI Pitch”. Caixin Global is one of the most respected sources for macroeconomic, financial and business news and information about China.

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