Photo: screenshot of the price of Huawei Mate 80pro 16GB+1TB

Major Chinese smartphone makers, including Huawei, Xiaomi and Honor, raised prices on selected models on Tuesday by between 200 yuan ($28) and 1,000 yuan, spanning flagship and mid-range devices, as rising costs for memory chips and mobile processors increasingly feed through to consumers.

Huawei raised prices for several Mate 80 Pro variants by 1,000 yuan, with the 12GB+256GB version rising from 5,999 yuan to 6,999 yuan and the 16GB+1TB version from 7,999 yuan to 8,999 yuan. Two Mate 80 Pro Max variants also saw 1,000-yuan increases, while prices across the Mate 80 series rose by 800 yuan.

Xiaomi raised prices across several models, with the starting prices of the Xiaomi 17 and 17 Pro each up 300 yuan, and the Xiaomi 17 Pro Max up 500 yuan. The REDMI K90 Max and K90 Ultra each rose by 400 yuan, while the REDMI Turbo 5 Max increased by 200 yuan. Honor also raised prices for its Power2 and Magic8 series.

Unlike past price adjustments for flagship models, which were tied to product life cycles or promotional strategies, this round of simultaneous price hikes involves multiple manufacturers across multiple price ranges, sparking market concerns over whether the smartphone industry is entering a new round of price-hike cycle.

Rising costs across the chip supply chain are seen as a key driver. Qualcomm, a major supplier of flagship Android smartphone chipsets whose Snapdragon platforms are widely used by Xiaomi, Honor, OPPO, vivo and Samsung, said in July that prices for products shipped after September 1 would rise by more than 10 percent across major chip lines, saying it had "exhausted its ability to absorb rising supplier costs" despite efforts to find cheaper alternatives.

Since the start of the year, tighter supplies of dynamic random-access memory (DRAM) and other memory chips, coupled with rapid expansion of AI servers and data centers, have pushed up demand for high-end memory and raised procurement costs for consumer electronics makers. 

Xiaomi President Lu Weibing said that memory-price increases may ease in the second half of the year, but the upward trend is likely to persist, keeping storage costs elevated.

Ma Jihua, a veteran industry analyst told the Global Times that the latest price hikes of smart devices were driven by rising costs for components, particularly memory chips. As the AI boom prompts some suppliers to shift capacity toward AI, supplies of consumer-electronics components have tightened, pushing up costs across the industry, forcing handset makers to pass more of the pressure on to consumers.

Ma said handset makers had previously absorbed some cost increases through supplier negotiations, configuration adjustments and thinner margins. The latest coordinated price hikes by major brands suggest rising component costs have become increasingly difficult to absorb.

Ma said that consumers' willingness to upgrade their phones is weakening, while existing smartphone functions are more than sufficient for most 5G applications. Further price increases could therefore weigh heavily on new-device purchases and reduce industry-wide shipments. 

As demand softens, orders for components such as memory chips may drop, eventually bringing supply and demand back toward a new balance. Emerging smart wearables could face an even bigger impact, as demand for such products is generally less rigid, he said.

Whether the latest price hike becomes an industry-wide trend will depend on memory and processor prices as well as consumer demand. If upstream costs remain high, more brands or new models could follow, though intense competition will force vendors to balance costs, sales and market share, Ma said.

In the long term, rising on-device AI capabilities will drive up demand for more powerful processors and larger memory and storage capacity, reshaping smartphone cost structures. Balancing AI-related hardware costs with consumers' willingness to pay will become a major challenge for handset makers, Ma said.


Global Times