On-the-ground investigation of Huaqiangbei! A wave of price increases is quietly emerging in the smartphone market, with mid-to-low-end models seeing the highest rise of up to 30%, potentially lasting until the end of 2027.

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（Source: Huaxia Times）

Our reporter (chinatimes.net.cn), Huang Haiting and Hu Mengran, Shenzhen photography report

In the spring of 2026, China’s mobile phone market is seeing a round of price increases that few expected.

After leading manufacturers such as OPPO, vivo, and Honor announced price adjustments one after another, price hikes for mid-range and low-end models are concentrated in the range of 200 to 500 yuan, and some high-end foldable flagships have risen by as much as 1,000 yuan. In sharp contrast, Huawei and Apple have not followed suit; relying on supply-chain advantages and high profit margins, they choose to “stand still and bide their time” in the face of cost pressure.

Reporters from Huaxia Times went deep into the front line of the Huaqiangbei market, visiting businesses including the Overseas Vision Digital Mall, Huaqiang Electronics World, and brand experience stores, and interviewing industry analysts to reconstruct the real logic behind this round of price hikes—an “absorption effect” in storage chips driven by rising AI computing demand is reshaping the cost structure of the mobile phone industry and changing the competitive landscape. And in this cost transmission process running from upstream to downstream, China’s smartphone manufacturers’ shortcomings—lack of autonomy and bargaining power over core components—are being peeled back layer by layer.

AI “eats up” storage capacity and drives up prices

“For mid-range and low-end phones priced at 1,000 to 2,000 yuan, don’t just look at the low price—the price increase is actually the biggest.” Huang Jieying, a relevant person in charge at Shenzhen Overseas Vision Digital Mall, showed Huaxia Times reporters a quotation sheet for the past period. “Because the base price is already small, a 300-yuan increase may mean a rise of 15% to 30%. All the pressure is right here.”

Based on the information she provided, starting in March, brands including OPPO, vivo, and Honor formally raised prices. Generally, each phone went up by 300 to 500 yuan, and some high-configuration models even increased by 700 yuan. Honor’s Dream Series and X Series, OPPO’s K Series and A Series and other high-volume models show particularly noticeable price fluctuations. Huawei and Apple’s official quotations have not yet been adjusted, but channel prices have already shown slight fluctuations.

The source of this round of price hikes is not at the terminal manufacturers—it is in the upstream supply chain. Zheng Jianmin, general manager of the customer repair end at the Shenzhen Overseas Vision Market Minsheng Mobile Phone Repair Headquarters, told reporters that the repair side sensed the changes first: “In the recent period, many devices’ chips like mainboards and memory have all risen by a certain amount. The parts with more obvious price increases are mainly mainboards and hard-drive memory-type components. They are related to the fluctuations in upstream storage chips and semiconductor components. Plus, with AI being hot this year, once core components rise in price, the downstream complete-device spare parts we sell are also affected.”

Zhang Yi, CEO of Analysys (iMedia) Consulting and its chief analyst, explained this phenomenon from a more macro perspective in an interview with Huaxia Times: “The fundamental reason for this round of price hikes is that, while AI servers are exploding in demand, storage capacity is being occupied in large quantities. Chips used in phones—memory, DRAM, NAND, and so on—have all risen sharply in price. At the same time, costs across the entire industry chain, including screens, chips, batteries, and more, are also moving upward.”

He further pointed out that mid-range and low-end models already have slim margins, so the cost pressure is quickly passed on to the terminals: “Mid-range and low-end models’ profits are already thin. The cost pressure passes through quickly, and ultimately forces terminals to raise prices.”

The rapid development of AI large models has led storage giants such as Samsung and SK Hynix to shift capacity away from consumer-level chips and toward AI computing chips with higher profit. This “absorption effect” in capacity directly results in tight supply of storage chips used in phones and drives prices up. And when cost pressure filters downward layer by layer, the first to bear the strain is the mid-range and low-end phone segment with the narrowest profit room.

Are domestic smartphone makers trapped in a “priced but not marketable” dilemma?

The chain of cost transmission does not stop at the upstream. When the price pressure lands on terminals, market segmentation becomes especially clear.

“Looking from wholesalers to downstream retailers, people now are clearly more willing to stock Huawei and Apple products,” Huang Jieying told Huaxia Times reporters. “The level of sell-through is roughly: Huawei is about equal to Apple, and higher than the OPPO, vivo, and Honor that have already raised prices. Because Huawei and Apple’s prices have stayed relatively stable, users buying these brands are not as sensitive to a few-hundred-yuan increase.”

She admitted that those few domestic manufacturers that raised prices are facing an awkward situation of “priced but not marketable”: “Many people see the price increase and choose to watch from the sidelines, or they simply go get their old phones repaired. This causes retailers’ inventory to pile up, slowing down turnover, and makes them much more cautious about restocking.”

At the terminal retail level, this split is also obvious. Huang Zhand a, head of the second-phone business department at Huaqiang Electronics World, showed reporters a seemingly contradictory phenomenon: although new phones have risen in price, his second-hand business has not undergone dramatic fluctuations because of it. “The price increases for new phones are mainly driven by upstream component cost increases. For second-hand phones, prices depend more on actual market circulation and supply-demand relationships. Consumers now don’t simply chase the newest models and higher prices—they care about practicality and value for money. When we buy phones, we also emphasize quick turnaround and immediate sales—we won’t blindly hoard just because new phones have risen in price.”

And at Huawei experience stores, reporters saw a different kind of calm. Chen Yutao, a consultant at the experience store, told reporters that currently phones have not increased in price, while computer products have already risen by 1,000 yuan. “Now phones haven’t gone up. Preorders are basically the same as usual, and there’s no special situation where people come specifically to抢购. Business on Saturday and Sunday is just a bit better.”

Why can Huawei and Apple “do nothing”? Zhang Yi analyzed the underlying supply-chain logic for reporters from Huaxia Times: “Apple and Huawei are both viewed as large manufacturers. They have extremely strong bargaining power over the supply chain. As Apple is the world’s largest buyer, it has long-term locked-price agreements, so the costs of core components like storage are not as affected by spot price fluctuations. Huawei is deeply tied to China’s domestic supply chain’s core components, with a very high localization rate, and its costs are also more stable and controllable.”

He further broke down the moat of these two leading companies: “Apple designs its own A chips and the iOS ecosystem, so it doesn’t need to pay external chip licensing costs, and its service revenue can offset hardware pressure. Huawei designs its own Kirin chips and the HarmonyOS system, freeing it from reliance on Qualcomm and MediaTek, and reducing rigid dependence on the cost of core components.” For other manufacturers that highly rely on external chips, their rigid demand for costs leaves them with almost no room to maneuver in the face of price hikes.

This reveals a deeper logic behind this round of price hikes: when cost fluctuations become the norm, what is tested is not brand premium pricing, but the ability to control the core supply chain. In this dimension, the gap between domestic manufacturers and leading brands is being amplified.

Price hikes may continue until the end of 2027

How long will this round of price hikes last? During its visits, Huaxia Times reporters found that the industry generally holds a cautious view. More worth focusing on is that this cost-driven price volatility is accelerating the reshaping of the industry’s competitive landscape.

“From the trend perspective, wholesale prices likely won’t come down in the short term, and they may continue to slowly rise,” Huang Jieying told reporters. “Many in the industry believe this price-hike cycle will last until the end of 2027. Next, the most likely time for another price adjustment is for mid-range and low-end phones in the 1,000 to 2,000 yuan range, because the profit margin for phones at this price level is already thin—once costs rise, the pressure becomes huge.” She predicted that manufacturers will likely maintain profit margins through a combination of “reducing configurations and raising prices.”

Zhang Yi’s judgment is more specific: “Tightness in storage capacity this year is likely to continue. Complete-device prices will remain at a high level, making them easy to rise but hard to fall. Next year, especially after the second half, once storage expansion takes effect and capacity returns to smartphones, cost pressure will ease, and there may be a turnaround after the rise. But in the long run, it won’t return to the level of prior price competition at low prices—the industry will enter a value-for-money stage.”

In his view, this round of price hikes is accelerating industry reshuffling, with small and mid-sized brands hit first. “Small and mid-sized brands have low procurement volumes and shallower technological moats. After costs rise, they either raise prices and lose market share or try to hold on at a loss, with their survival space squeezed significantly. The leading effect will further strengthen: Huawei, Apple, Xiaomi, OPPO, vivo, and Honor will further grab market share, and the market below 1,000 yuan will face severe challenges.” At the same time, he pointed out that this round of price hikes is not entirely “passive”—as the industry enters inventory competition, leading brands can take the opportunity to break away from low-price competition, proactively raise the price floor, optimize product structure, and transition into higher gross-margin segments.

On the repair side, Zheng Jianmin also feels cost transmission pressure, but he observes that consumers are becoming more rational. “In the past, many people would buy as soon as a new phone came out. Now, if it breaks, they can get it repaired first if possible, and they are more inclined to choose based on value for money.” He also pointed out that the overall quality of domestic smartphones is improving. “Mainstream brands overall are improving too—their craftsmanship and quality are getting more mature. From our day-to-day repair work, each company has its own stable products, so it’s hard to say who is better.”

From market stalls in Huaqiangbei to brand experience stores; from second-hand phone counters to industry analysts—one consensus is taking shape: as AI computing demand continues to “absorb” storage capacity, and as costs for core components continue to climb, domestic smartphone manufacturers’ shortcomings in supply-chain security and bargaining power are being magnified. Domestic manufacturers that raise prices while bearing cost pressure passively also further reveal a lack of sufficient bargaining power over core components.

This AI-driven “absorption effect” in chips is reshaping the mobile phone industry’s cost structure and competitive landscape. In the short term, it’s difficult to reverse the imbalance in supply and demand for storage chips, and the transmission effect of terminal price hikes is still continuing. But in the medium to long term, what truly determines the industry’s direction is not one round after another of price adjustments, but who can build its own moat in core technologies. As Zhang Yi said, the market ultimately still looks at product strength and consumer acceptance—and the foundation for all of that lies in the ability to control the supply chain.

责任编辑：徐芸茜 主编：公培佳

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