Summary of Key Points
Recently, the domestic smartphone market has seen several rounds of collective price increases. On September 1st, brands such as Huawei and Honor raised prices across all price segments, with some flagship models seeing increases of over a thousand yuan. This is not the first time; brands like Xiaomi and Huawei have also adjusted prices multiple times in July and August. The main reason for the price hikes is the explosive rise in the cost of upstream storage chips (memory prices increased by more than 80% quarter-on-quarter in the second quarter), which has pushed up the overall material costs of smartphones. Different price segments have been affected to varying degrees, and manufacturers are responding by streamlining their product lines and reducing specifications. The cost pressure will continue in the future, and the industry is moving away from low-price competition towards "cost-driven value competition."
1. How significant are these price increases?
Brands like Huawei and Honor have affected almost all price segments:
- High-end flagships: The entire Huawei Mate80 series has seen a price increase of 800 yuan (from 4699 to 5499 yuan for the 12+256GB version), with the Mate80 Pro/Pro Max versions increasing by 1000 yuan each. The top-of-the-line Pro Max (16+1TB) version now costs over 9999 yuan. The Honor Magic8 has increased by 300-500 yuan, with the top configuration reaching nearly 6000 yuan.
- Mid-range models: The Huawei Enjoy 90 Pro Max has increased by 200 yuan (from 128GB to 1899 yuan), and the Honor Power2 has increased by 500-600 yuan (starting at 3199 yuan).
- Online vs. offline differences: Prices were first raised through official online channels, with offline third- and fourth-tier channels still having a buffer period (for example, the Mate80 12+256GB version is still available for 5199 yuan offline). Some platforms have not adjusted prices yet after receiving government subsidies, but offline stores are expected to follow soon.
2. The main culprit behind the price hikes: the soaring cost of upstream storage chips
The price increases are not due to manufacturers wanting to make more profit; rather, they are "forced" by the dramatic rise in upstream component costs:
- Storage chips are the primary driver: According to Counterpoint, smartphone memory prices increased by more than 80% quarter-on-quarter in the second quarter of 2026, directly boosting the "BOM (Bill of Materials) costs" of smartphones. For example, the cost of low-end phones increased by 70% solely due to storage chips; for mid-range phones, memory costs account for 40% of the total cost; in high-end flagships, the cost of RAM (DRAM) is even higher than that of the main processor (SoC).
- Not only storage chips, but also main processors are rising: The cost of 2nm process flagship processors expected to be released in the second half of the year has increased significantly compared to last year's versions, putting even more pressure on the cost of high-end phones.
3. Different impacts on low, mid, and high-end phones, and manufacturers' responses
Facing rising costs, manufacturers are adopting different strategies for different price segments:
- Low-end phones: Manufacturers are simply reducing their product lines by discontinuing or not releasing entry-level models to avoid losing money on each sale.
- Mid-range phones: They are "downgrading" specifications to maintain profits—for example, not upgrading to better cameras or other components.
- High-end phones: Although the cost increase is the most significant, manufacturers are reluctant to downgrade specifications (for fear of losing customers) and thus have to raise prices. Even with the price increases, the gross profit margins of high-end phones in 2026 are still lower than last year.
4. Will phone prices continue to rise in the future?
Analysts predict that Android flagship phone prices will continue to rise in the second half of the year:
- Continuing cost pressure: The dual increase in 2nm processors and storage chip costs will further drive up the cost of flagship phones.
- Manufacturers' reluctant choices: To control costs, manufacturers may delay the release of new phones or streamline their product lines (for example, postponing the release of certain flagship models).
- Self-developed chips are a short-term solution: While manufacturers can develop their own chips for charging and imaging components, developing high-end SoCs is too challenging and cannot immediately offset procurement costs.
5. An industry transformation: from "who offers the lowest price" to "who offers the best value"
These price increases mark a complete shift in the smartphone industry from a focus on low prices to a focus on value:
- In the past: Manufacturers competed on price, such as which phone had the best specifications or the lowest price.
- Now: With costs rising so sharply, selling at low prices is no longer profitable, so the focus has shifted to "value competition"—rivaling on technology (such as better cameras, battery life) and user experience (such as smoother systems). In the future, consumers may have to pay more for phones, but they will get products that offer more value.
Overall, the increase in phone prices is not a short-term phenomenon but a long-term trend driven by changes in the industry's cost structure. For ordinary consumers who want to upgrade their phones, it's best to take advantage of the current buffer period in offline stores or wait for government subsidy policies to continue. However, in the long run, phones that are both cheap and good may become increasingly rare.