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Since the fourth quarter of 2025, the price of memory has risen rapidly, driving up the overall costs of mobile phone manufacturers. The prices of consumer memory sticks have mostly increased by two to three times and could even jump by more than six times at one point.
In the mobile phone sector, signs of a “retreat” are already evident. In January 2026, Meizu cancelled the market launch plan for its new model, the 22Air, and stated that the sharp increase in memory prices has dealt a huge shock to the business plan of mobile phones. Within less than a week, Asus announced that it would no longer develop new mobile phones and instead focus on PCs and various AI devices (Artificial Intelligence).
In the mobile phone industry, which already has low profit margins, mobile phone manufacturers are faced with a decision: either raise prices or reduce the configuration. In the wave of memory price increases, on the one hand, mobile phone manufacturers raise prices and promote premiumization, and on the other hand, they streamline their product offerings and reduce the supply volume. Some mobile phone manufacturers are also stepping up their exploration of foreign markets.
Currently, about 50% of the 500 million consumers in China use mid - range mobile phones. This is the foundation of the Chinese mobile phone market and is also the segment relatively severely affected by the price increase. Mid - and low - end mobile phones are known for their good price - performance ratio. The main differences in configuration compared to premium smartphones lie in the camera, screen, and processor. Memory is a basic feature of mobile phones, and the memory difference between mid - and low - end and premium smartphones is not very significant.
Lu Weibing, the president of Xiaomi, explained in an online show at the end of 2025 that the increase in memory costs far exceeds the costs of the processor and camera and has thus become the “major part” of mobile phone costs.
The memory price will continue to rise. A study by the independent market research firm Counterpoint shows that the memory price could potentially increase by about 40% by the second quarter of 2026, further driving up material costs. The increase ranges from 8% to over 15%.
01
Limited Room for Price Increases and Cost Reductions
According to an incomplete statistic from “Caixin”, the new prices of new mobile phones launched by manufacturers such as Xiaomi, OPPO, vivo, Honor, and OnePlus in the past three months have increased by 100 to 600 yuan compared to their previous models. In particular, the price difference between the 512 - GB and 256 - GB versions of mid - range models has mostly increased from 300 yuan to 400 to 600 yuan.
The continuous increase in memory prices is further driving up the costs of mobile phones. From a cost - structure perspective, memory usually accounts for 15% of the BoM (Bill of Materials) of a mobile phone. In mid - range models, this proportion can reach up to 20%.
Except for a few manufacturers like Apple and Huawei, the hardware profit margins of leading Chinese mobile phone brands mostly range between 10% and 20%, and the net profit rate is often below 10%. Lin Keyu, a senior analyst at Counterpoint, told “Caixin” that most manufacturers hardly make any hardware profits on their entry - level models.
Guo Tianxiang, the research manager of IDC China, told “Caixin” that some low - end devices are already operating at a loss.
Price increase is the most direct countermeasure. Guo Tianxiang mentioned that the price of the common “12 GB + 256 GB” memory combination increased by a full 75% last year. However, it is questionable whether consumers will accept the higher price. Therefore, manufacturers need to find a balance. In October 2025, the 300 - yuan price increase of the Redmi K90 smartphone series sparked discussions. Just one day after its market launch, the price was lowered again. Lin Keyu analyzed that the increase in the retail price should not exceed 10%, as it would directly affect consumers' purchasing decisions otherwise.
Lu Weibing explained in a post that the cost increase from the supply chain has actually been passed on to the prices of new products. “We cannot influence the development of the global supply chain. The increase in memory costs is also much higher than expected and will continue to worsen.”
Premium smartphones find it easier to pass on costs to consumers due to their stronger product premium capabilities. Guo Tianxiang noted that the price increases of many Chinese flagship models in September last year did not significantly affect the actual sales volume.
Guo Tianxiang believes that when manufacturers have difficulty increasing prices across the board, they are more likely to control costs through structural adjustments. On the one hand, they change suppliers or have production done by ODMs (Original Design Manufacturers). On the other hand, they reduce specifications in areas that are less noticeable to consumers, such as adjusting the type of memory or reducing the supported network bands.
The pressure is passed on step by step and also spreads to other component suppliers in the supply chain. The “Smartphone Display Market Insight” study by the independent market research firm Omdia shows that mobile phone manufacturers, especially Chinese brands, lack confidence in passing on the increased costs of memory components to consumers or fear that price increases will lead to a decline in sales volume. Therefore, they force other component suppliers to lower prices by continuously reducing their business plans for 2026.
The study shows that this will cause the global supply volume of AMOLED screens for smartphones to decline for the first time after three years of growth. In 2026, it is estimated to be 810 million units.
However, the room for price cuts is limited. Last year, mobile phone manufacturers lowered the prices of AMOLED screens significantly to gain market share, and it is difficult to offer further discounts. In addition, the AI boom has also increased the demand for other mobile phone components such as T - Glass (glass fiber fabric), and the supply is tight, further restricting the adjustment room of end - device manufacturers.
02
Hidden “Retreat” and Divergence
With the increase in memory prices, the market competition in the smartphone industry could further widen. The robustness of the supply chain and the ability for vertical integration will become key factors in the competition among manufacturers.
Guo Tianxiang analyzed to “Caixin” that the supply of leading mobile phone manufacturers is relatively stable, and the main competition lies in price and price binding. Smaller manufacturers, on the other hand, face uncertain supplies and higher procurement costs.
According to a report from IDC, manufacturers mainly specializing in the low - end market (such as TCL, Transsion, Realme, Xiaomi, Lenovo, OPPO, vivo, Honor, etc.) will be severely hit. The increase in memory costs will seriously affect their profit margins. Although Apple and Samsung in the premium segment are also under pressure, they have structural advantages to mitigate risks. Their sufficient cash reserves and long - term supply agreements enable them to secure memory supplies 12 to 24 months in advance.
However, this advantage does not mean that the pressure disappears. Previous reports have shown that memory chip giants Samsung Electronics and SK Hynix have decided to significantly increase the price of LPDDR (low - power memory, the common standard configuration for mobile phones) for the iPhone through negotiations with Apple Inc. One is demanding a quarterly increase of over 80%, and the other is even asking for almost a double price increase.
Runar Bjørhovde, a senior analyst at Omdia, said that the competition among manufacturers to ensure supply and control costs is very fierce. All manufacturers are taking countermeasures, such as emphasizing long - term partnerships, leveraging economies of scale for capacity binding, and focusing on core suppliers.
As the cost pressure increases, smartphone manufacturers are also adjusting their strategies. They either raise prices or reduce the configuration - a dilemma. Moreover, the Chinese smartphone market is already extremely competitive. IDC data shows that the supply volume of the Chinese smartphone market in 2025 was about 285 million devices, a slight decrease of 0.6% compared to the previous year. The difference between Huawei, the market leader, and OPPO, the fifth - ranked provider, was only about 3.3 million devices.
Several mobile phone manufacturers have reduced their orders for finished products in 2026. According to public reports, the reductions mainly focus on mid - and low - end segments and products for foreign markets. Xiaomi and OPPO have reduced their orders by over 20%, vivo by almost 15%, and Transsion to less than 70 million devices.
Guo Tianxiang explained that the foreign markets of mobile phone manufacturers mainly cover mid - and low - end segments and are therefore the focus of order adjustment.
“The King of Africa” Transsion has established itself in foreign markets with mid - and low - end segments. The average price of Transsion smartphones was once only 332 yuan, and the average price of feature phones was even as low as 50 yuan. But this pricing strategy was hit the hardest. In 2025, Transsion Holdings' revenue was 65.568 billion yuan, a decrease of 4.58% compared to the previous year. The net profit was 2.546 billion yuan, a decrease of 54.11% compared to the previous year, which is the worst record since its listing.
Wan Zhiqiang, the CMO (Chief Marketing Officer) of Xingji Meizu Group in China, explained at the New Year's party for Meizu fans in 2026 that the sharp increase in memory prices has dealt a huge shock to the business plan of mobile phones and cancelled the market launch plan for the Meizu 22 Air.
At the end of 2025, Li Jie, the president of OnePlus China, also mentioned at a press conference that the increase in memory prices far exceeds expectations and exerts pressure on the pricing policies of all mobile phone manufacturers in the industry.
Luo Feng, the vice - president of product at iQOO, explained in an interview with the media that the increase in memory prices affects the entire industry. It not only impacts the price of new products during the initial release phase but also the price throughout the product life cycle, the sales rhythm, and the configuration of the entire product. For example, price cuts during large - scale sales periods are significantly restricted.
In the past three to four years, mobile phone manufacturers have tried to give mid - range smartphones “flagship - level quality” to gain market share. But according to IDC forecasts, this trend is now reversing. The process of transferring the functions of flagship models to affordable smartphones will be hindered.
Several people in the mobile phone industry described to “Caixin” that under the current supply pressure, the only way is to “strive upwards and outwards”. Premium smartphones have a relatively larger profit margin, and there are also opportunities in foreign markets.
Guo Tianxiang analyzed that in foreign markets, especially in some developing countries, the demand for mobile phones is still in the growth phase. Costs can be reduced through economies of scale. In the markets of Europe and North America, the price demand for mobile phones is relatively higher.
In 2026, the global smartphone market will enter a phase of “volume decline and average price increase” under supply pressure. The difficulty of achieving premium spaces through premiumization and expansion abroad is increasing, and the industry competition will further diverge. Both IDC and Counterpoint expect that the global smartphone sales volume will decline by at least 2% this year. Lin Keyu believes that the impact of the increase in memory prices on the mobile phone industry will last until the end of 2027 or even the end of 2028.
This article is from the WeChat account “Semi - Ripe Finance” (ID: Banshu - Caijing). Author: Huang Siyun, Editor: Liu Yiqin. Published by 36Kr with permission.