Prices of both smartphones and computers are rising, and young people are paying the "AI tax."

The "wait-for-price-cut" group, who are used to waiting for price reductions and subsidies, have encountered price hikes this year instead.

The price rise of mobile phones started as early as last October. The standard versions of new models such as realme GT8, iQOO 15 and OPPO Find X9 are 200 to 300 yuan higher than their previous generations. In March this year, OPPO and OnePlus raised prices for their existing old models. On September 1, multiple mobile phones under Huawei, Xiaomi and Honor collectively adjusted their prices again, covering cost-effective models and high-end flagships. Amid the back-to-school season and new graduates joining the workforce, young people's budgets for purchasing electronic devices are somewhat insufficient.

Computers and tablets have also avoided the price surge. Data from the National Bureau of Statistics of China shows that in July this year, the prices of computers, tablets and mobile phones rose year-on-year by 17.4%, 17.2% and 8.5% respectively, with all growth rates expanding.

The long-lasting price hike pressure has directly impacted the industry. Small manufacturers were the first to be unable to withstand it. In February, Meizu announced the suspension of self-developed hardware projects for new domestic mobile phone products. Some low-end models of realme, which follows the cost-effective route, were exposed to be trapped in negative gross profit, ending nearly 8 years of independent operation and returning to OPPO in January this year. Leading manufacturers including Xiaomi, OPPO and vivo collectively lowered their annual shipment targets in the first half of this year, with the cuts mainly focused on mid-to-low-end and overseas models.

The reason behind this round of price hikes is that AI data centers are purchasing a large number of storage products, and storage manufacturers are shifting more production resources to servers and high-bandwidth memory, leading to rising procurement costs for mobile phones and computers amid tight supply.

Inventory shortages are still ongoing. On September 7, South Korea's KB Securities released a report stating that the storage chip inventories of Samsung Electronics and SK Hynix have dropped to less than 10 days of supply, and it is expected that the supply will still be significantly insufficient in 2027.

It is increasingly difficult to maintain the original price, while raising prices may drive away buyers, making the mobile phone and computer business more challenging.

01. Mobile phones and computers see simultaneous price rises, young people recalculate their device replacement budgets

Xiao Lu, who just graduated from university this year, has been very hesitant recently. She told *Dingjiao One* that her current computer has been used for four years, with insufficient memory and frequent lags. She originally planned to replace it with a MacBook Air after receiving her first salary to complete the Apple "family bucket" ecosystem, but found that this model has increased by 1500 yuan. Thinking that her roommate got it for 6500 yuan with education discount plus government subsidies before the price rise in April, Xiao Lu felt she lost a lot. The old computer that she used to dislike suddenly became quite "satisfying".

For Wang Cheng, who just finished the college entrance examination, the price rise disrupted his entire shopping plan. He told *Dingjiao One* that he originally planned to buy a new phone, computer and tablet, but found that the devices he favored kept increasing in price. After calculating the total cost, he decided to reduce his "back-to-school three-piece set" list. The tablet is not a necessity and can be postponed; he will choose the entry-level computer model; for the mobile phone, he can first use the old model from his parents and consider replacing it until the Double 11 shopping festival. Devices do not need to be fully configured at one go, nor do you have to buy every item brand new.

Some people have shortened their shopping lists, while others turn to second-hand devices. Li Yun mentioned that she initially took a fancy to the Honor 500 released last November, which could be obtained for about 2200 yuan after various activity subsidies for the standard version, but now the price has risen to around 3000 yuan. This made her recalculate the cost performance, considering adding some budget to buy a basic iPhone which can be used for more years and may be more cost-effective. However, seeing the continuously rising prices, she finally bought a second-hand mobile phone.

The price surge that makes young people hesitant has lasted for almost a year since the release of new phones at the end of last year. There have been three rounds of concentrated price adjustments for existing models alone this year.

The first round was in March, mainly affecting mid-to-low-end models. OPPO and OnePlus took the lead in raising the prices of A-series, K-series and Ace-series, with most increases ranging from 300 to 500 yuan. Vivo and iQOO followed up later, with increases mostly from 100 to 500 yuan, and the price of some top-tier versions even rose by 700 yuan. Taking iQOO Neo11 as an example, the starting price increased from 2599 yuan to 3099 yuan, and the mobile phone that used to cost only more than 2000 yuan has crossed the 3000 yuan threshold.

The second round lasted from April to August, with some models seeing multiple consecutive price rises. Taking REDMI K90 Pro Max as an example, its price increased by 200 yuan in April, and rose by another 300 yuan in August. For the same mobile phone, buying it a few months later means paying hundreds of yuan more.

The third round came in September, with price increases covering the full price range from thousand-yuan phones to flagship models. Among mid-to-high-end models, Honor Magic8 and OPPO Reno16 were raised by 300 to 500 yuan respectively. Flagship models saw larger increases: all storage versions of the standard Huawei Mate 80 rose by 800 yuan, and all versions of Mate 80 Pro and Pro Max rose by 1000 yuan. This round covers a wider range and has a larger increase, and even the Huawei Mate series, which had not been adjusted before, saw full-line price rises.

Price rises have changed the business strategies of physical stores. *Dingjiao One* visited multiple mobile phone stores in Beijing, and frontline sales staff will prioritize recommending flagship models that have not increased in price. Taking Honor as an example, the products with price rises in the store are mainly low-end and mid-to-high-end models. After the price of some mid-to-low-priced models increased, some consumers began to re-compare the price difference between them and the unadjusted flagship models, and found that the unraised flagship models are more cost-effective instead.

A salesperson at a Xiaomi store in Beijing mentioned that some customers originally came for flagship models, but after comparing prices, they turned to lower-priced REDMI products. Some others still want to buy the model they originally favored, but will hesitate between the 256GB and 512GB versions, wondering whether to spend more money for larger storage space. After the price rise, the hundreds of yuan price gap for the large-capacity version has become a new point of hesitation.

Computers started rising in price earlier, with larger increases. At the beginning of this year, Lenovo raised the prices of multiple laptops on its official website by 500 to 1500 yuan. In April, brands including Lenovo, HP and Dell adjusted their prices across the board, with an overall increase starting from 20%. In June, Apple followed up, and the starting prices of MacBook Neo, MacBook Air and 14-inch MacBook Pro rose by 900 yuan, 1500 yuan and 2500 yuan respectively.

The successive price rises of mobile phones and computers have raised the threshold for young people to replace their devices, and buying new phones and choosing high-spec configurations is no longer the default option.

02. AI expansion brings the "AI tax"

Why have mobile phones and computers seen price rises one after another in the past year? One important reason is that AI is "competing for memory" with consumer electronics.

AI servers, mobile phones and computers use the same type of storage chips. DRAM is responsible for running memory, temporarily storing data required for program operation; NAND flash memory is used to save photos, videos and files. The high-bandwidth memory HBM on AI graphics cards is essentially DRAM, which competes for the same wafer production lines as mobile phone memory, while enterprise-level solid-state drives compete for NAND production capacity with mobile phone flash memory.

The reason why storage manufacturers prioritize supplying AI data centers is that these orders are more profitable. Server products have higher profits, and data center customers are also willing to accept higher prices and sign long-term procurement agreements to ensure product supply. However, mobile phone and computer manufacturers find it difficult to raise prices to compete for supplies, because the consumers they face are more sensitive to price increases. According to TrendForce's forecast, the proportion of wafer input for HBM among the three major storage suppliers will rise from 18% at the end of 2025 to 22% at the end of this year, calculated against their total DRAM input.

Mobile phone manufacturers whose production capacity has been squeezed out are the first to be impacted on their profit statements. The second-quarter financial report released by Xiaomi shows that the gross profit margin of mobile phones dropped from 11.5% in the same period last year to 8.5%, and the company explained that the decline in gross profit margin was mainly affected by the rising prices of key components. In addition, at the financial report conference call, Lu Weibing, President of Xiaomi, took the 8GB+128GB configuration as an example, saying that calculated based on the memory cost in the second quarter, the cost of this part alone converted to the retail price of mobile phones has exceeded 1500 yuan.

Apple has also been inevitably affected. The financial report for the third quarter of fiscal year 2026 shows that although the overall revenue increased, about 2 percentage points of its 50.1% gross profit margin came from one-time income from tariff rebates, and after excluding this part, the gross profit margin was about 48.1%, down 1.2 percentage points from the 49.3% of the previous quarter. The company's revenue growth guidance for the next quarter is only 9%-11%, showing a significant slowdown.

The same situation applies to the computer sector. In the third quarter of HP's fiscal year 2026, the revenue of its personal systems department increased by 18% year-on-year to 11.77 billion US dollars, with an operating profit margin of 4.6%; during the same period, total PC shipments fell by 16%, among which consumer PC shipments fell by 19%. Lenovo's situation is similar. The financial report for the first quarter of fiscal year 2026/27 shows that Lenovo's global PC shipments reached 16.6 million units, down 2.1% year-on-year, but PC revenue increased by 30% year-on-year, the growth is mainly driven by the average product price.

In the short term, the cost pressure of storage is difficult to ease. TrendForce predicts that in the third quarter of this year, the contract price of storage chips will continue to rise, with DRAM increasing by 13%-18% quarter-on-quarter, and NAND flash memory increasing by 10%-15% quarter-on-quarter. Although the increase rate is narrower than that of the previous quarter, suppliers continue to tilt their production capacity to servers and high-bandwidth memory, and mobile phone manufacturers still cannot expect a significant drop in costs. The proportion of storage in the component cost of mobile phones has risen from the previous 10%-15% to 30%-40%.

Manufacturers can ease the pressure by relying on inventory and existing procurement contracts, or reduce their profit margins a little, but these methods can hardly offset the rising costs continuously. As a result, the cost is transmitted to consumers: the same configuration is more expensive, and the same budget can only get smaller storage capacity.

The expansion of AI data centers seems far away from ordinary people's shopping carts, but through storage chips, young people who want to replace their devices have also borne part of the cost of AI expansion. Some people call this invisible allocation the "AI tax": you may not have used AI yet, but you have already paid for it.

03. To achieve higher selling prices, manufacturers compete in AI and foldable screens

After the prices of mobile phones and computers rise, some consumers decide to wait longer, but manufacturers cannot afford to wait. Low-priced devices are becoming a business where selling each unit means losing money.

Taking mobile phones as an example, entry-level phones have very thin profits in the first place. The limited selling price needs to cover the costs of processors, screens and batteries, leaving little room for storage price rises. According to IDC's analysis of the second-quarter market, the proportion of storage cost in the material cost of some low-end mobile phones has exceeded 65%. If they continue to maintain the original price, profits may be eroded. If they raise the selling price, they are likely to lose price-sensitive buyers.

The most direct response is to shrink low-end product lines. IDC data shows that in the second quarter of this year, global smartphone shipments below 100 US dollars fell by nearly 60% year-on-year. Some Android manufacturers focusing on low-end products are cutting low-priced models. Xiaomi is one of the brands that took the initiative to make adjustments. IDC pointed out that Xiaomi shrank the shipment of low-end products in the second quarter to maintain profitability, shifting its focus to higher-priced products.

Some other manufacturers choose to stay and try their best to hold the low-price market. The Omdia report mentioned that some entry-level models have reduced their storage configurations and no longer increase their memory capacity. Some other manufacturers cut costs on other configurations: OnePlus was exposed to restart the 4G product line in India to reduce costs by omitting the 5G module.

Another path is to move upward. When the cost-effective story can no longer convince consumers, manufacturers need to find a reason for consumers to spend more. One is to move products to the high-end track, focusing on promoting mid-to-high-end flagship products; the other is to add AI functions to products, using new features to support new prices.

To move products to the high-end market, a ready-made solution is the foldable screen. As one of the few categories that can still tell innovation stories, foldable screens have become the most concentrated track for manufacturers to impact the high-end market. On September 7, Huawei and Xiaomi released new foldable screen phones on the same day. Among them, the starting price of Huawei Mate XT 2 is 19999 yuan, and the top-tier version is 24999 yuan. The starting price of Xiaomi 18 Fold is 10999 yuan, which is the first time that Xiaomi has set the starting price of a mobile phone above 10000 yuan.

AI is another path to support new prices. Counterpoint Research predicts that in 2026, mobile phones supporting generative AI will account for 45% of global shipments, higher than the 36% in 2025.

However, the mobile phone market has long been a stock competition. For brands that used to attract users with cost performance, it is not easy to persuade the same group of people to accept higher prices now. As mid-range phones of various brands have raised prices and narrowed the price gap with flagships, some consumers will directly choose high-end brands they trust more instead.

IDC predicts that global smartphone shipments will drop by 16.7% in 2026, while the average selling price will rise by 27.6% to 581 US dollars, driving the market sales to grow by 6.3%. Mobile phones are sold in smaller quantities but at higher prices. Shipment volume is no longer the primary goal for manufacturers, and the top priority is to maintain profits.

Computer manufacturers face the same problem and have two choices. One is to raise prices directly and pass the