Hands On: ZTE Axon 7, the First Google Daydream VR Phone

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ZTE's new Axon 7 may be a Daydream become real: Google's Daydream VR platform, to be exact. The newest flagship from the sometimes No. 4, sometimes No. 5 US smartphone maker is the first official Google Daydream VR compatible handset and the only unlocked Snapdragon 820-powered phone you can get in the US for under $500.

Those are some good flags to plant in the ground for ZTE, which does well at selling affordable phones but not so well in the premium segment. Last-year's model, the Axon Pro, was quickly eclipsed even in the unlocked-phone niche by Google's Nexus 6P.

The Axon 7, ZTE's new premium model announced today, is a second try at raising the company's profile. Designed in part by Designworks, a subsidiary of BMW, it's slimmer than last year's phone, with a big fingerprint sensor on the back and thoroughly updated specs.

The Axon 7 will come in gold and gray. It measures 6 by 2.95 by 0.34 inches and weighs a hefty 6.5 ounces. On the front, there's a 5.5-inch, 2,560-by-1,440 AMOLED screen using Gorilla Glass 4, an 8-megapixel camera and dual stereo speakers. On the back, there's a fingerprint sensor and a 20-megapixel f/1.8 Samsung camera. The phone has a sealed-in 3140mAh battery, and one of those witty SIM card slots that lets you put in either two SIMs, or a SIM and a MicroSD card. Inside, there's a 2.2GHz Snapdragon 820 processor, 4GB of RAM, and 64GB of storage. There's a USB-C port on the bottom.

The Axon 7 still feels like a big phone, but it doesn't feel like a giant boat the way the Axon Pro did. ZTE got rid of the idiosyncratic imprinted triangles for more conventional drilled speaker holes, and the effect of the whole thing is to be softer, rounder, and a little kinder than last year's phone. The fingerprint sensor on the back is indeed very well-placed for your index finger, the dual stereo speakers are loud, and the AMOLED colors are vibrant.

As for performance, I only used the phone for a few minutes, but Snapdragon 820 devices so far have had pretty similar, very good performance. I'm especially impressed with the 820's modem performance, both on Wi-Fi and cellular, compared to last year's phones.

The phone ships with Android Marshmallow, but it'll get Android N.

"We have early access to Android N like some other OEMs, with the anticipation that this will be updated as quickly as possible," ZTE USA VP Jeff Yee said.

It'll also be the first phone we've heard of to support the new Daydream VR platform, which Google said was coming in phones this fall.

ZTE Axon Pair Embed

Axon Pro at left, Axon 7 at right.

"There's a spec now from Google that you have to match to be VR ready," Yee said. "VR is a key selling point this year."

A 128GB variant, which probably won't be available in the US, will also support force touch, which Google will enable with an update to Android N, Yee said.

The fact that ZTE is coming in with a Snapdragon 820 phone under $500 says a lot about ZTE's place in the US market. While there are other Chinese makers with cheaper phones running Qualcomm's speedy premium processor, Xiaomi and LeTV just can't get their acts together to figure out how to sell phones here. But ZTE, unlike those much-talked-about competitors, has managed to get in with major US carriers, and is fluent with selling phones here.

"ZTE is continuing to grow, as we go from prepaid to midrange," ZTE USA VP Jeff Yee said. "Our midrange phones did very well last year ... those sell into the millions."

ZTE's reign as the only lower-cost, unlocked premium device in the US may be short lived. The upcoming Moto Z may offer stiff competition in a similar price range when it's announced on June 9, and the OnePlus 3 is coming around June 14.

The phone will initially be compatible with AT&T and T-Mobile, with Sprint and Verizon compatibility appearing in a later firmware update once those networks approve the device. It has frequency bands for everyone.

Yee said the Axon 7 will sell for roughly what the original Axon Pro did, so, $450 or less. It'll go on sale in mid-June. Its price undercuts the unlocked HTC 10 and iPhone 6s by $200, but that's still a tough unlocked price point here in the US, because people willing to pay that much typically jump up to a more popular Samsung, LG, or Apple design.

So the Axon line's impact in the US may be showing technologies, like dual-lens cameras and hi-fi audio, which will appear in midrange devices later. The new ZTE Grand X Max 2 for Cricket has last year's Axon Pro's dual-lens camera, for instance, and it costs only $199.

"Spinoffs of these technologies will be sold by the carriers," Yee said. "Everything trickles down. The flagship technology from two years ago is now in those $50 prepaid phones."

Where's the Moon Shot?
I've been following ZTE for five years now, and it's always worth comparing it to its big Chinese rival, Huawei. Huawei and ZTE are like the Samsung and LG of China—gigantic telecom conglomerates with huge staff and huge profiles, especially outside the U.S.

Huawei builds higher and higher quality products through stepwise innovation. ZTE is at its most interesting when it throws Hail Marys, moon shots. Take the Spro, the smart projector. Maybe it wasn't a best-seller, but it sure was fascinating, and I'm glad someone is taking those kinds of risks. With its new product categories, ZTE is a bit more like vibrant Xiaomi or LeTV, which are always striking out in new directions.

The latest crazy ZTE idea is "Project CSX," its community-supported technology, where it's supposed to be crowdsourcing an idea for a product to be released in early 2017. Will it be a phone? A camera? A Coolest Cooler? It's up to us.

After some delays, ZTE's Z-Community website launches later today, and the company will start taking input on Project CSX "within two months," Yee said. "We haven't changed our plans to announce something in early 2017."

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