CITIC SEC released a research report stating that AI smartphones represent the next major transformation highly prioritized by leading smartphone manufacturers. Third-party large model developers, such as Doubao, are actively entering the market, recognizing smartphones as the core hardware platform in the era of on-device AI. In December 2025, Doubao and Nubia jointly launched an AI smartphone featuring the Doubao Mobile Assistant, equipped with system-level intelligent agents, high permissions, and cross-application execution capabilities. This development is expected to accelerate the arrival of the "smartphone intelligence" era, with 2026 poised to become the breakout year for AI smartphones, driving significant new opportunities across the supply chain.
Key recommendations include: 1) Brands deeply integrated with Doubao and similar platforms; 2) Manufacturers with self-developed AI large model capabilities; 3) Hardware upgrades benefiting from AI adoption—flagship chips (high-performance processors), memory (increased capacity + 3D-DRAM trends), cooling, and power management; 4) The broader supply chain benefiting from AI-driven smartphone replacement cycles.
**Background: Slowing Innovation Makes AI Smartphones the Next Big Leap** Smartphone hardware advancements alone are no longer sufficient to drive replacement cycles. According to TechInsights, the global average annual smartphone replacement rate has declined from 30%-60% (region-dependent) to 23.7% in 2024 (equivalent to a ~51-month replacement cycle). As the most widely used smart device globally, smartphones face growing user demand for streamlined interactions—such as information aggregation, task automation, and reducing fragmented workflows. AI agents are expected to revolutionize smartphone user interfaces, potentially becoming the key driver of the next replacement wave.
**Current Landscape: Major Players and Large Model Developers Are Investing Heavily** Leading smartphone manufacturers worldwide have positioned AI smartphones as a core strategic focus, introducing features like AI assistants, photo enhancement, voice recognition, and multimodal interactions between 2023 and 2025. However, these efforts have yet to deliver transformative consumer experiences. Meanwhile, third-party large model developers, including Doubao and Wenxin Yiyan, are partnering with manufacturers to accelerate AI integration. By late 2024, Canalys reported collaborations between top Chinese brands and these developers.
On December 1, 2025, Doubao and Nubia (a subsidiary of ZTE) unveiled an AI smartphone with the Doubao Mobile Assistant, embedding large-model capabilities directly into the OS. This system-level agent, with elevated permissions, enables cross-application execution of complex tasks—addressing prior limitations like fragmented functionality, limited intelligence, and weak user engagement. The launch has drawn significant industry attention.
**Outlook: Doubao’s Model Could Mirror Huawei’s Success in Smart Driving** While concerns remain around system security, data privacy, ecosystem control, and profit-sharing, the Doubao-Nubia collaboration represents a critical step forward. Drawing parallels to the automotive industry, where autonomous driving faced skepticism but became a strategic priority, AI smartphones promise expanded market potential, business model shifts, and ecosystem realignment. Doubao’s entry signals that manufacturers must accelerate AI adoption to remain competitive.
The partnership between Doubao and Nubia resembles Huawei’s successful collaboration with Seres in smart vehicles, suggesting large model developers could empower smartphone makers with advanced AI capabilities and ecosystem support, speeding up the launch of breakthrough AI devices.
**Risks Include:** - Slower-than-expected global economic recovery; - Delays in AI smartphone product launches; - Memory price hikes impacting consumer electronics demand; - Underwhelming on-device AI model performance; - Weak smartphone demand; - Intensifying industry competition.
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