Source: Duke Internet News Agency

On March 16, vivo's announcement of a price increase sent ripples through the domestic smartphone market.

The message was clear: Owing to skyrocketing global semiconductor and memory costs, certain models from vivo and its subsidiary iQOO will undergo across-the-board price adjustments starting March 18.

Just six days prior, OPPO had already set the wheels in motion—beginning March 16, select models from its A series, K series, and some OnePlus offerings will see collective price hikes.

With two industry giants taking the leap, offline retailers are already adjusting their strategies: Mid-range models are expected to see price increases of RMB 300-500, with premium foldable-screen devices facing maximum hikes of up to RMB 2,000. Meanwhile, when Xiaomi Group President Lu Weibing was questioned by netizens about potential price rises, his response—"I empathize with our competitors; everyone is struggling, and we're hurting too"—laid bare the industry's predicament:

No manufacturer dares to promise "no price hikes," nor does any wish to be seen as the "bad guy" initiating them. Yet, this wave of price increases, affecting all price tiers and mainstream brands, has become inevitable.

【The Final Nail in the Coffin of Affordability, Driven by Memory Chips】

The dominance of domestic smartphones over the past decade was never rooted in brand loyalty but in a strategy of "extreme affordability" deeply ingrained in their DNA.

The crux of this strategy wasn't manufacturers' "generosity" of "not making money to make friends" but the decade-long cost reductions in consumer electronics supply chains—particularly memory chips, a major cost driver in smartphones. Years of declining memory chip prices enabled manufacturers to produce high-memory, high-performance entry-level models (priced around RMB 1,000) for just RMB 999, pushing affordability to new heights.

But this paradigm shifted entirely starting in Q2 2025.

This round of memory chip price hikes isn't a short-lived market fluctuation but an unprecedentedly prolonged upward cycle in industry history. Lu Weibing publicly forecasted that this wave of increases would persist from Q2 2025 through the end of 2027, spanning nearly three years. Data from TrendForce reveals: In Q1 2026, contract prices for smartphone DRAM (operational memory) surged 55%-95% quarter-over-quarter, while NAND flash memory prices rose 33%-38%, with spot prices skyrocketing over 300% in three months.

In layman's terms: A mainstream 12GB+256GB storage module, which cost less than $30 (around RMB 200+) during the downturn, has now soared to $120 (around RMB 860), adding over RMB 600 to per-unit storage costs. The cost of a single 1TB flash memory chip climbed from around RMB 200+ in 2025 to nearly RMB 600, more than tripling.

More critically, memory chips' share of total smartphone material costs has surged from the traditional 10%-15% to 30%-40%, with some entry-level models nearing 50%, shattering already razor-thin profit margins.

Simply put, the previous myth of affordability was essentially a transfer of supply chain dividends. Now that the supply chain has shifted from "lowering prices to flood the market" to "raising prices to drain resources," even the most extreme affordability strategies have become untenable. One offline distributor bluntly stated that no entirely new sub-RMB 1,000 models are now available in the market. Former RMB 999 entry-level models have either jumped to over RMB 1,500 or had configurations slashed to the point of stuttering during basic video streaming.

The numbers speak volumes: The market share of sub-RMB 1,000 models plummeted from 22% in 2023 to less than 3% in Q1 2026, with only a few clearance old models remaining. Brands that once swept the market through affordability are now among the hardest hit—after all, cost-plus pricing strategies simply can't work when costs double.

【The More Prices Rise, the Less Users Replace: A Vicious Cycle Emerges】

In stark contrast to manufacturers' collective price hikes is users' sustained rationalization—even downgrading—of consumption.

The most perilous contradiction in this price hike wave lies here: Manufacturers aim to offset costs and protect profits through price increases, but users' wallets can no longer keep pace with product upgrades.

Data released by the China Academy of Information and Communications Technology in January 2026 underscores this reality: The average replacement cycle for domestic smartphone users has extended to 40.2 months—three years and four months—nearly doubling from 25 months five years ago. Counterpoint's report is even harsher: The global average smartphone replacement cycle now approaches four years, with high-end model users waiting 4.5 years between upgrades.

Smartphones, once fast-moving consumer goods replaced every two years, are now durable goods—"replaced only when broken"—no different from household refrigerators or TVs.

The core reason for the prolonged replacement cycle, beyond slowing hardware performance iterations and improved system optimization, is users' shifting consumption expectations. During economic downturns, attitudes toward non-essential large expenditures have become increasingly cautious. Replacing smartphones is no longer an annual routine but "something to avoid if possible, delay if necessary."

Manufacturers' collective price hikes will undoubtedly intensify this wait-and-see sentiment, creating an unsolvable vicious cycle: Price hikes → users delay replacements → sales decline → manufacturers further raise prices to protect profits → users delay even more.

IDC's forecast confirms this risk: China's smartphone shipments in 2026 are expected to total around 278 million units, down 2.2% year-over-year, with the market size continuing to shrink. Users' consumption behavior has also polarized: Some have given up and continue using old devices; others opt to "go all-in" and buy high-end flagship models to amortize costs over longer periods.

This polarization has shattered the once-core mid-range market and fueled explosive growth in the secondhand smartphone market. Data shows China's secondhand smartphone market is expected to surpass 100 million units in 2026, up 20% year-over-year, with over 70% of low-end users delaying new phone purchases—either sticking with old devices or switching to the secondhand market.

Users' consumption downgrading and manufacturers' price upgrading are forming a dangerous collision—manufacturers want to extract more profit per device, but fewer users are willing to buy new phones.

【Don't Hide Behind Costs: Price Hikes Are a Strategic Move】

All manufacturers attribute price hikes to "rising memory costs." But this collective price increase is far more than just "cost-driven."

Rather than a passive, helpless move, it's a long-planned premiumization breakthrough for domestic manufacturers, riding the wave of cost increases.

One detail exposes this strategy: OPPO's price adjustments cover mid-to-low-end entry models like the A and K series, as well as the cost-focused OnePlus brand, while high-end Find and Reno series models are excluded for now. vivo's price hikes, though brand-wide, see the largest increases in mid-range volume models, with flagship price hikes relatively controlled, according to offline channel feedback.

This means manufacturers' price hikes are essentially raising the price floor across entire product lines, abandoning the past model of "low-end volume wars + high-end profit" to shift the entire pricing structure upward.

For the past decade, domestic smartphones have been trapped in a "cost-effectiveness trap": Low-end markets relied on price cuts for volume but generated no profits, while high-end breakthroughs were stifled by Apple's dominance, with consumers unwilling to pay premium prices for domestic brands. Before 2023, Apple held over 80% market share in China's ultra-premium (RMB 6,000+) segment, leaving domestic players to scrap over scraps in the low-to-mid-range market.

But in recent years, domestic manufacturers' premiumization efforts have shown results. Counterpoint data shows that in 2025, domestic players captured 47% of the ultra-premium market, up 29 percentage points from 2023, while Apple's share slid from 82% to 51%, dropping below 60% for the first time. The average selling price of domestic smartphones also surged from RMB 2,685 five years ago to nearly RMB 4,000 today—a RMB 1,400 increase.

Premiumization has shifted from an "option" to a "must" for domestic manufacturers.

This wave of memory cost increases provides the perfect cover.

Previously, manufacturers dared not raise prices for fear of being labeled "ungrateful" and losing cost-conscious users. But now, with "global supply chain cost increases" as an industry-wide excuse, manufacturers can seamlessly cross previously untouchable price thresholds, offsetting cost pressures while shifting their pricing structures upward and shedding the "low-price, low-quality" label. Why not?

Simply put, cost increases are a natural disaster, but manufacturers may be seizing this opportunity to accomplish what they've long wanted but dared not attempt—breaking free from cutthroat competition in the low-end market, securing pricing power, and truly competing head-on with Apple in the premium segment.

【Can Inflated Prices Sustain Domestic Smartphones' Ambitions?】

This collective price hike isn't a temporary adjustment but a profound restructuring of China's smartphone industry. It marks the definitive end of the extreme affordability era and places domestic manufacturers at a new crossroads.

Two unavoidable questions loom for domestic players:

First: Now that prices have risen, can your product strength and brand power justify higher pricing?

Previously, users bought domestic smartphones primarily for "half the price of Apple for similar specs." Now that prices have risen, if manufacturers merely stack hardware without core technological barriers, compelling system experiences, or true brand premium, why wouldn't users just spend more on Apple?

Second: With sub-RMB 1,000 models vanishing and the low-end market shrinking, how stable is domestic smartphones' core user base?

Domestic players' global market share dominance once relied on full price coverage from RMB 999 to RMB 10,000+, built on tens of millions of entry-level users. Now, voluntarily raising the entry threshold to RMB 1,500+ may boost per-unit profits but also means ceding massive entry-level user groups to the secondhand market—or even the resurgent counterfeit device market.

More brutally, this memory chip price hike cycle will last nearly two more years. In other words, current price hikes may just be the beginning.

If memory chip prices continue rising, will manufacturers keep raising prices? Will users' replacement cycles extend to four or five years? As the installed base market becomes increasingly saturated, can price hikes really solve domestic manufacturers' profit anxieties?

When we personally dismantle the cost-effectiveness myth that fueled our rise, can inflated prices truly win users' voluntary buy-in?

Note: Some data in this article is sourced from publicly available online materials.