Mid-range mobile phones are in a dilemma.

In October, major mid-range smartphone brands successively launched new models: iQOO 15, Redmi K90, OnePlus 15... Three new models were released within a week.

In the past two years, the global smartphone market has started to rebound and grow. According to data from Canalys and Counterpoint, sales increased by about 4% to 7% year-on-year. However, the growth is mainly concentrated at the two extremes of high-end and low-end. The mid-range smartphones, which used to hold up half of the entire mobile phone market, seem to have lost their growth opportunities long ago.

However, the user base in this segment is the largest.

Public data shows that among nearly one billion users in the Chinese smartphone market, 500 million users are using mid-range smartphones priced between 2,000 and 4,000 yuan. Brands like Realme, OnePlus, iQOO, Redmi, and Honor are all competing fiercely in terms of high performance and cost-effectiveness.

While top manufacturers are chasing high-end markets, they also continue to hold their ground in the mid-range market.

Since the OPPO Reno14 was launched in May this year, the Huawei nova 14 series, Xiaomi Civi 5 Pro, and vivo S30 series have taken turns to enter the market. Although domestic mobile phone manufacturers have been striving to reach the level of Apple, in fact, most of the new models launched in the domestic market last year were still mid-range smartphones.

As more and more mid-range smartphones are introduced, the pressure in this segment has never been greater.

"Cost-effectiveness" is no longer the driving force for growth

One reality that has to be faced is that currently, the Chinese smartphone market has entered the stock era from the incremental era, and the contradiction between the high-end trend and consumers' price sensitivity has become increasingly prominent. On the one hand, in the global mobile phone market, the market share of smartphones priced above $600 has increased from 11% to 28%.

On the other hand, the latest report from Counterpoint shows that the average selling price of global smartphones in 2024 was $356, approximately 2,594 yuan. A survey by Sina Technology shows that up to 70% of users clearly stated that they would not accept price increases for mobile phones.

The performance in the consumer market is even more obvious. Data from the JD platform shows that in Q4 2024, the sales of flagship smartphones decreased by 8% year-on-year, while the sales of mid-range models (priced between 2,000 and 3,500 yuan) increased by 12%.

On one hand, high-end mobile phones are continuously expanding their market share. On the other hand, the upgrade of consumers' mobile phone consumption has not been truly realized. This rather absurd contrast has forced manufacturers to focus their competition on the mid-range market priced between 2,000 and 3,500 yuan, which has also indirectly led to the gradual ineffectiveness of cost-effectiveness, the main driving force for the growth of mid-range smartphones.

Taking 2024 as an example, as many as 396 new models were launched in the Chinese market, with most of them being mid-range smartphones. From November 25th to December 5th alone, there were the vivo S20 series, REDMI K80 series, OPPO Reno13 series, Honor 300 series, iQOO Neo10 series...

However, the intensive product iterations have not brought about real differentiation. Instead, they have led to serious performance overcapacity and homogenization.

It is reported that as of now, features such as thin and light design, satellite communication, AI eye protection, and good performance in photography, music, and games, which were once the core selling points in the over-2,000-yuan price range, have basically become standard configurations for mid-range smartphones. Even the "price differentiation" no longer exists. For example, in the 2,599-yuan price range this year, there are the Redmi K90 standard version, OnePlus Ace 6, and iQOO Neo11.

When mid-range smartphones from all brands have similar parameters and functions and there is no significant price difference, it is obvious that consumers will find it difficult to make a choice through comparison.

Secondly, the fierce price war has further weakened the cost-effectiveness advantage of mid-range smartphones.

To date, the mid-range smartphone market has shown a trend of "price-cutting involution." Initially, the starting prices of the Honor 300 series, vivo S20 series, and iQOO Neo10 Pro were approximately 400, 300, and 200 yuan lower than their previous generations respectively. Coupled with the national subsidies, the competition in terms of cost-effectiveness has been unprecedentedly fierce.

Data shows that during the first phase of the Tmall 618 in 2025, more than 2,000 mobile phones supported the combination of Tmall 618 discounts and national subsidies. With double subsidies, the prices were as low as 50% off, covering mainstream mobile phone brands such as Huawei, Xiaomi, OPPO, vivo, Honor, Samsung, and OnePlus. The prices of some mid-range models were far from their original launch prices.

During the Double 11 period, the subsidy-driven consumption continued. It is reported that models such as the vivo X200 series and iQOO Neo series are expected to have a 10%-20% price cut during the "Double 11" period. Cost-effective models like the iQOO Neo10 once dropped to 1,571 yuan during the 618 period. All these signs have put mid-range smartphones in an extremely awkward competitive situation.

In addition, the price cuts in the high-end camp have dealt a crucial blow to mid-range smartphones.

Originally relying on cost-effectiveness, mid-range smartphones have seen their core competitive advantages further undermined after high-end smartphones lowered their price thresholds. Consumers can access high-end configurations without paying a high price, which naturally diverts potential users of mid-range smartphones and makes the already pressured mid-range market even more difficult.

For example, flagship models such as the Huawei Mate 70 series and Pura 70 series are expected to have a price cut of more than 1,000 yuan during the "Double 11" period. The iPhone 16 Pro was included in the national subsidy scope for the first time during the 618 this year, which directly led to a nearly 200% increase in Apple's transaction volume in May compared to the previous month. During the Double 11 period, the previous generation iPhone 16 series of Apple had a price cut of more than 20%. The starting price of the iPhone 17 standard version remained at 5,999 yuan (256GB storage), and after the national subsidy, the price dropped to 5,499 yuan. Undoubtedly, this price range has directly invaded the territory of domestic manufacturers, and both the mid-range and high-end segments have been affected to varying degrees.

As early as the third quarter of last year, Apple's price cuts led to a 7% decrease in the shipments of the main models of domestic manufacturers priced between 3,000 and 5,000 yuan compared to the previous quarter. According to Counterpoint data, in the first two weeks of October 2025, the sales of smartphones in China increased by 11% year-on-year. Among them, the sales of Apple iPhones increased by 29% year-on-year.

In the stock era, the cost-effectiveness foundation of mid-range smartphones has been undermined by multiple factors.

The homogeneous competition makes it difficult for products to form unique value; the disorderly price war compresses the profit and value space; coupled with the downgrade of consumer demand, users tend to choose low-priced and practical products or are attracted by the price-cut high-end smartphones... The interaction of these three factors has made the situation of mid-range smartphones increasingly difficult.

Beyond gaming, competing in various user demands

To be honest, even without the influence of various complex factors, the situation of mid-range smartphone brands in the entire mobile phone market would not be very good. The consumer group in this price range lacks brand loyalty. Their core demands are both cost-effectiveness and the "ultimate satisfaction" at the same price level.

From brands like Redmi, Honor, iQOO, and Realme starting with a large product portfolio and cost-effectiveness strategies to creating "sub-flagship" models by inheriting flagship technologies, the original competition logic of mid-range smartphones has been exhausted. Now, brands in this market need to focus on highlighting their individual strengths.

For example, in October this year, the iQOO 15, Redmi K90, and OnePlus 15 all focused on gaming as the highlight of their new models.

There has been intense competition among mobile phone brands in the gaming segment.

Since 2017, driven by a series of popular national games such as "Honor of Kings" and "PlayerUnknown's Battlegrounds," mobile phones like the Razer Phone by Razer, the Black Shark invested by Xiaomi, the Nubia Red Magic by ZTE, the ROG by ASUS, the iQOO by vivo, the Realme by OPPO, and the Lenovo Legion gaming phones have been successively released.

However, dedicated gaming phones have not been able to gain a firm foothold. It is worth noting that mid-range smartphones generally incorporate gaming-related configurations such as e-sports optimization and flagship-level performance. Some brands have achieved quite good results. For example, the Honor GT Pro focuses on the e-sports segment and won the sales championship in the 3,000-5,000 yuan range on all platforms during its first sales period.

Coincidentally, on October 27th, OnePlus announced that it would continue to focus on the gaming performance segment. Data shows that OnePlus' sales in the first three quarters increased by 36.7% year-on-year, making it the brand with the fastest growth rate. A large number of users are from other brands, and it is estimated that OnePlus' overall growth rate this year is expected to reach 50%.

The "2024 China E-sports Industry Report" shows that the number of e-sports users in China has reached 490 million, with a relatively high proportion of the "Z generation" (those born between 1995 and 2010). Users of gaming phones are characterized by youthfulness (over 72% are between 18 and 35 years old) and high activity. Their average mobile phone replacement cycle is only 18 months, significantly shorter than the 24 months of ordinary smartphone users.

Currently, domestic mobile phone manufacturers are competing fiercely for young users. As of June 2025, the proportions of users under 24 years old for Xiaomi, OPPO, and vivo have reached 35.2%, 32.8%, and 40.7% respectively, with year-on-year increases of 5.3%, 3.2%, and 4.8% respectively...

Specifically, OnePlus has targeted the high-activity gaming user group aged between 18 and 35 and successfully attracted users from other brands. This also implies that mobile phone manufacturers need to extend their segmented functions to more demand scenarios and achieve in-depth binding with target users by highlighting their corresponding strengths, thus breaking out of the homogeneous involution.

Besides gaming, what kind of mid-range smartphones do young people need? Social imaging, long battery life, and practical AI features... These all seem to be the answers.

Interestingly, the transfer of flagship technologies has enabled most mobile phone manufacturers to build their strengths. The popularization of technologies such as photography algorithms, flagship processors, and high-silicon batteries has allowed mid-range smartphones to break away from the previous performance compromises. While pursuing all-round performance, focusing on a single segment is also a viable option.

More importantly, the simplification of edge-side models and the upgrade of chip computing power will further promote the penetration of AI mobile phones into the mid-range price segment.

Data released by Counterpoint shows that starting from 2025, Gen AI functions will gradually become popular in mid-range models. 59% of people plan to upgrade to Gen AI smartphones within a year. By 2027-2028, even entry-level smartphones will be equipped with generative AI technology.

However, what is worrying is that the window of opportunity opened by segmented functions for mid-range smartphones will soon become a new arena for involution. As Gen AI technology accelerates its penetration into the mid-range price segment and imaging optimization and long battery life become standard points of competition, brands are flocking to popular segmented segments, and the once-differentiated strengths will quickly be replicated and caught up by competitors.

Just like the so-called "well-rounded phones" back then, mid-range smartphones have quickly fallen into a new whirlpool after breaking out of the old cycle.

How to get out of the "profit dilemma"?

According to the news from the China Report Hall website, as of the end of the third quarter of 2025, the Chinese electronic information manufacturing industry has continued its steady growth trend. The mobile phone industry, as a core area, has performed particularly prominently. In the first three quarters, the production of smartphones in China reached 881 million units, a year-on-year increase of 1%.

However, this growth has not translated into market profit dividends. Specifically, in the first half of 2025, the profits of many mobile phone manufacturers have dropped significantly:

In July, Samsung Electronics released its financial report, showing that its revenue from April to June reached 74 trillion won, basically flat year-on-year and a 6.49% decrease quarter-on-quarter. During the same period, the company's operating profit decreased by 55.94% year-on-year. In China, in the first half of the year, Huawei's net profit was 37.195 billion yuan, a year-on-year decrease of 32%.

Looking at a broader scope, the profit fluctuations in the mid - and low - end camps are even more significant:

The gross profit margin of Xiaomi's smartphones decreased from 12.1% in the same period last year to 11.5%, and the gross profit margin in the previous quarter was 12.4%. Transsion's operating income from January to September this year was 49.54 billion yuan, a slight year-on-year decrease of 3.3%. Its net profit attributable to shareholders decreased significantly to 2.15 billion yuan, a year-on-year plunge of 44.97%. The non-recurring profit after deduction further dropped to 1.73 billion yuan, with the decline expanding to 46.71%.

Since OnePlus was incorporated into OPPO, only its sales volume is known, and its profitability has always been a mystery. As early as 2022, OnePlus even publicly stated that in order to produce good products in the next three years, the comprehensive net profit margin of hardware could be zero. It seems that the only company that has been making money steadily is Apple. In the fourth fiscal quarter, Apple's net profit was $27.466 billion, an 86% increase compared to $14.736 billion in the same period last year.

Why have the profits of mobile phone manufacturers dropped significantly in 2025?

Lu Weibing, the president of Xiaomi Group, further explained the reason for the decline in gross profit margin, saying that the price increase in the entire memory market this year was much higher than expected, coupled with the export control of building materials. At the same time, Li Jie of OnePlus also said that the current mobile phone industry is facing rising costs of upstream components: "Currently, the price of memory has increased significantly, while other components show periodic fluctuations."

Facts have indeed proven this.

According to a report from the Beijing News, the price increase of storage