How AI is killing smartphone apps in China

Chinese smartphone manufacturers have been following Apple and Google's lead in the global market for the past two decades. However, artificial intelligence (AI) may present an opportunity for Chinese companies to forge their own path. Chinese phone makers are increasingly integrating AI into smartphones and using it for limited robotics within devices. Here's what you should know about these emerging trends.

ZTE recently unveiled the Nubia NaviX Ultra, which runs ByteDance's Doubao AI agent. Users can interact with this agent through voice commands or a dedicated button. Notably, the Nubia NaviX Ultra has no home screen or conventional app store. Meanwhile, StepFun, founded in 2023 by Jiang Daxin, a former Microsoft executive, sells the StepX Neo.

This phone runs a proprietary operating system called Step AOS based on Android, Linux, and an RTOS. The phone also features a built-in AI agent called Step Amoo, which splits phone functions into four categories: communication, apps, files, and system tools.

Honor, a Huawei spin-off, has developed its own AI agent called the YOYO Intelligent Agent. This agent is integrated into Honor's MagicOS 10-eligible lineup. All three phones utilize Anthropic's Model Context Protocol (MCP) to grant system-level access to the agents. Importantly, none of these phones will be available in the United States, as ZTE is already banned from the US due to national-security concerns, while the StepFun and Honor phones are designed specifically for the Chinese market with no US version planned.

The most significant difference between agentic AI phones and traditional smartphones lies in the operating system itself. Traditional smartphones rely on apps, while agentic AI phones feature an agentic AI layer that enables the operating system to function across apps rather than treating each app separately. This shift toward agentic AI phones marks a minority of the current market but foreshadows a potentially transformative future.

One potential benefit of agentic AI phones is their potential to reduce dependence on Android. Google's services layer has already departed from China, and now the Android app layer is being replaced by vertically integrated agent stacks owned by Chinese super-app companies. While Apple and Google are unlikely to permit third-party agents to replace their mobile OS app layers, Chinese Original Equipment Manufacturers (OEMs) can disrupt the app model since they had no prior investment in it.

Moreover, the AI trend is impacting mobile app in-app purchases, which have declined by around 40% since early 2026, even as users pay more for those purchases due to subscriptions to AI and vibe-coded apps. The shift from the traditional app model to AI replacements is evident both within app stores and within the hardware model.

Another emerging trend is the nascent market of robot phones, which use AI to control physical robotic components on actual phones. The Honor Robot Phone, for instance, features a gimbal with a 200-megapixel camera and can perform subtle attachment economy features such as shaking its head, nodding yes, and doing a backflip to cheer up the user.