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<Research>M Stanley Reiterates Overweight on TENCENT/ BABA-W/ MEITU; Limited OEM Options Make It Difficult to Build Ecosystem for Doubao AI Smartphones
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Regarding ByteDance's Doubao AI smartphone assistant, Morgan Stanley said in its research report that this feature envisions a rich ecosystem, but its execution faces challenges. The broker still views app-related stocks as the top picks for AI investment, reiterating an Overweight rating on TENCENT (00700.HK), BABA-W (09988.HK), and MEITU (01357.HK). Yesterday, ByteDance released a demo video showcasing the new Doubao AI smartphone assistant, which has been integrated into a sample smartphone operating system from ZTE (00763.HK). While the video indicates that the Doubao assistant can read users' screens, access smartphone apps, and complete complex tasks, Morgan Stanley believes that its promotion will be challenging, as major smartphone OEMs and super apps are more inclined to develop their own AI assistants rather than rely on ByteDance. The broker also believes that there will be substantial obstacles in OEM cooperation. The implementation of the Doubao assistant requires deep technical cooperation and commercial negotiations with different smartphone OEMs, given that it involves operating system-level modifications, redefines the value proposition of smartphones, and weakens the bargaining power of OEMs in the supply chain. As for major smartphone OEMs (such as Apple, Huawei, and XIAOMI-W (01810.HK)), they have strong technical capabilities and are more likely to have their own AI assistants rather than cooperate with ByteDance, leaving very limited OEM cooperation options for ByteDance. Accordingly, it will be very hard to build the Doubao ecosystem in the Chinese market. AAStocks Financial News |
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