China is reinventing smartphones with AI agents
ZTE's NaviX Ultra sold out in hours as AI phones gain momentum
1The rise of AI phones
ZTE unveiled the NaviX Ultra, calling it the world's first 'agentic AI smartphone'. Powered by ByteDance's Doubao agent, the device activates via voice or dedicated button. The initial 30,000 units sold out rapidly, with resale prices doubling in secondary markets.
2Competitive landscape
ZTE isn't alone: StepFun introduced its Amoo agent with proprietary OS, while Honor showcased an AI solution co-developed with Alibaba. All aim to deliver an autonomous cross-app task execution layer, moving beyond traditional 'bolted-on AI features' approaches.
3Market pressures
China's smartphone shipments have declined for five consecutive quarters. Rising component costs and weakening demand create challenges. IDC predicts record global market decline by 2026. AI phones may offer manufacturers a viable path forward in this constrained environment.
4Apple rivalry intensifies
Chinese manufacturers claim AI leadership over Apple, which recently secured approval to deploy Apple Intelligence in China via Baidu and Alibaba partnerships. ZTE's Ni Fei stated 'We're ahead of Apple in AI smart devices,' signaling growing competition in this space.
5Consumer adoption question
Will flight-booking or photo-editing agents convince users to replace existing devices? Market answers may emerge by year-end. IDC forecasts AI devices could capture over 50% of China's smartphone market, though real-world utility remains unproven at scale.
6Industry transformation
The AI boom killing budget smartphones simultaneously creates a new device category. For Chinese manufacturers facing margin pressures, integrated AI agents promise both user experience revolution and potential cost relief - if consumers embrace this paradigm shift.
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