Before the official start of 6·18, smartphone manufacturers launched a price offensive, but the “protagonists” were no longer mid-range and low-end models—instead, they were high-end devices.

At midnight on May 15, the iPhone 17 Pro series saw a blanket price reduction of RMB 1,000. Combined with trade-in offers, dual subsidies provided an additional RMB 2,000 discount, bringing the final price to RMB 6,999 and officially entering the RMB 6,000 price bracket. Huawei followed suit, offering a RMB 1,000 discount on the Huawei Mate X7, starting at RMB 11,999 after the reduction, and a RMB 3,000 discount on the Huawei Mate X6. Earlier, the Xiaomi 15 Ultra saw a direct price drop of RMB 1,500, and with various subsidies, the expected final price for the 256GB version could fall to just over RMB 4,300.

Against the backdrop of widespread price hikes by smartphone manufacturers this year, the simultaneous, significant price reductions of high-end models from the three leading brands quickly sparked heated market discussions, with the hashtag #AppleHuaweiXiaomiCollectivePriceCuts trending first on Weibo.

While consumers rejoiced, the industry sensed a strong whiff of gunpowder—this was not a simple joint e-commerce platform promotion but a precise “encirclement” by Apple, taking advantage of other smartphone manufacturers being forced to raise prices and suppress demand. Especially in the high-end market, this price war revealed profound changes in the competitive logic among smartphone manufacturers. As competition intensifies, the high-end market is nearing its final showdown.

Behind the price war lies supply chain competition

In this round of price cuts, Apple, with its evident sincerity, undoubtedly emerged as the biggest beneficiary. According to a report by Red Star News, journalists visited Zhengzhou’s Zhihui City and Buynow, where a store merchant stated that, based on recent sales, Apple’s sales volume had surged six to sevenfold, the most significant increase among all brands.

Apple’s price reduction was not driven by poor sales. In the first quarter of this year, Omdia data showed that initial sales of the iPhone 17 Pro and Pro Max fully surpassed those of the previous generation, with a year-on-year increase of 42% in the Chinese mainland market.

Now, with the stimulus of price reductions, the iPhone 17 series is likely to see a new sales peak. This confidence comes not just from the price cuts but, more precisely, from the fact that as other domestic smartphone brands raise prices and their cost-effectiveness weakens, Apple, with its stable and discounted prices, has become synonymous with “high cost-effectiveness.”

Against the backdrop of upstream cost increases being passed on to end consumers, Apple and Huawei’s proactive price reductions stem from the significant profit margins of high-end models, which provide room for concessions. However, a deeper reason lies in their strong supply chain bargaining power and cost control capabilities, which minimize the impact of upstream cost increases, giving them greater pricing autonomy.

Take Apple as an example: through long-term supply agreements and price-locking contracts with manufacturers like Samsung and SK Hynix, Apple can obtain core components at relatively stable prices, making it far more resilient to market shocks than competitors purchasing from the spot market. Industry insiders claim that as one of the world’s largest purchasers of memory chips, Apple’s storage procurement costs may be 30% to 40% lower than those of Android manufacturers by exclusively locking in low-priced long-term contracts.

In terms of cost control, Apple has successfully achieved internal cost reductions through self-developed technologies in recent years. For instance, the Apple A-series chips are 100% self-developed, and the self-developed C1X baseband costs about RMB 120 per unit, saving approximately RMB 80 per device compared to purchasing Qualcomm basebands... These structural cost reductions create advantages that are further amplified during industry price hikes.

Thus, Apple and Huawei’s counter-trend price reductions and volume-for-price strategies amount to a dimensionality reduction attack, significantly squeezing the survival space of other competitors.

The supply chain capability gap hidden behind this price war may indicate that the core competitive logic in the high-end smartphone market is shifting toward supply chain competition. For a long time to come, the entire smartphone industry will likely continue facing upward pressure on upstream costs—after all, smartphone manufacturers are not just competing against each other but also vying for resources with the AI industry. If semiconductor market supply continues to be “plundered” by AI computing power, upstream component prices are unlikely to return to their original levels.

The high-end market can no longer accommodate a “third player”

As the overall smartphone market continues to shrink, the growth potential of the high-end market has made it a battleground that all smartphone manufacturers want to conquer.

Counterpoint Research data shows that in the first half of 2025, global high-end smartphone sales increased by 8% year-on-year, reaching a record high for the first half of any year, outpacing the overall global smartphone market. The market price structure has also adjusted accordingly. In the first quarter of 2026, the share of entry-level smartphones priced below USD 200 in the Chinese market contracted significantly by 13.9 percentage points year-on-year, while the mid-range segment (USD 200–600) expanded by 3.8 percentage points, and the high-end segment (above USD 600) grew substantially by 10.1 percentage points.

Several years ago, domestic smartphone brands began ramping up their high-end strategies, collectively aiming for the top tier. Especially after Huawei’s smartphone business faced turmoil, leaving a significant market vacuum, brands like Xiaomi attempted to swiftly enter the high-end market and capture share. However, with this price war as a watershed, China’s high-end market may soon be left with only Apple and Huawei, while other brands’ high-end ambitions will be officially declared failed, leaving them unable to continue competing.

Given the reality of increasingly prolonged average replacement cycles for mass-market smartphones, even in the high-end segment, consumers lack the motivation to proactively upgrade, making price reductions the most effective means to stimulate market growth. The essence of the price war has now become a supply chain contest—in the future, only Apple and Huawei will be able to afford such battles.

Xiaomi’s participation in price reduction activities resembles a “market share defense war” that it cannot avoid. For a long time, Xiaomi’s smartphone business has heavily relied on mid-range and cost-effective models, yielding thin profits. Thus, it has been most severely impacted by upstream storage price hikes. Although high-end smartphones carry the hope of improving profits, for Xiaomi, safeguarding its core position in the mid-to-low-end market is now more urgent than maintaining its presence in the high-end market.

Counterpoint Research data shows that in the first quarter of 2026, Xiaomi’s market share in China dropped to 12%, ranking sixth, with shipments declining by as much as 35% year-on-year.

The same applies to other smartphone brands. Through this price war, they must recognize the reality that Apple and Huawei’s counter-trend price reductions could easily seize their accumulated high-spending users in the high-end market. Moreover, as the high-end market grows and the low-end market contracts, Apple and Huawei are poised to capture even greater market share.

Of course, the passivity of Xiaomi and other domestic smartphone manufacturers in the high-end market also stems from their failure to establish a high-end brand perception among users. In the eyes of most consumers, the only high-end brands are Apple and Huawei—they are willing to pay a premium for Apple or Huawei but not necessarily for Xiaomi or other brands’ high-end models.

This is due to the difficulty of breakthrough innovations amid smartphone performance excess, which no longer brings novelty, and is also closely related to smartphone manufacturers’ failed technological approaches.

Apple and Huawei’s real enemy might be AI

Five years later, Huawei has regained the top spot in China’s smartphone market. With the continuous recovery of its Mate and Pura series, the domestic high-end smartphone market has entered a “duopoly competition” pattern (translated as “duopoly competition” for context).

According to third-party full-year market data for 2025, in the mainstream high-end segment of RMB 5,000–6,000, Huawei overtook Apple to rank first, with Apple close behind. In the ultra-high-end segment above RMB 6,000, Apple led, particularly in the top-tier flagship market above RMB 8,000, where Apple dominated with a 73.5% share.

Apple leads, Huawei pursues—this ongoing rivalry will define the future competitive landscape of China’s high-end smartphone market. However, while Apple and Huawei firmly dominate user perception in the high-end market, they continue to face long-standing issues such as a lack of disruptive features, sluggish replacement demand, and technological bottlenecks. Yet, an even more threatening variable may emerge from the current AI technology wave.

The skyrocketing upstream storage prices serve as a straightforward example. The explosion of generative AI acts like a massive pump, continuously drawing semiconductor production away from mass consumer goods toward high-performance computing centers, resulting in severe supply shortages and price pressures for smartphones.

Although Apple and Huawei are less affected, their absolute influence over the semiconductor supply chain has undoubtedly weakened.

In the end-user market, the AI technology wave is spawning an increasing number of smart hardware devices, which may also impact—or even disrupt—the dominance of smartphones in the consumer electronics market. For instance, in the AI smartphone race, earlier expectations were that the integration of AI technology and smartphones would bring about significant innovations. However, it is now the “outsiders” in the industry who are expanding the imagination for AI smartphones.

After jointly launching the Doubao smartphone with Nubia last year, a blogger revealed that the second-generation Doubao AI smartphone is expected to be released in the first half of 2026. According to recent foreign media reports, OpenAI is also accelerating the development of its first AI Agent smartphone, with mass production scheduled to advance from the original plan of 2028 to the first half of 2027.

The Doubao AI smartphone once alarmed smartphone manufacturers and nearly all internet companies due to its radical technological approach: AI directly identifies screen content and simulates human operations through a GUI Agent, bypassing traditional API limitations. Theoretically, it could order takeout, send messages, or book flights on your behalf, transcending any App boundaries. Although this smartphone disappeared due to joint resistance, it fundamentally triggered new industry imagination about the future of smartphone intelligence.

More importantly, the “prototype” AI smartphone presented by Doubao directly blocks traditional smartphone manufacturers from delivering a true AI smartphone.

Developing an AI smartphone is a systems engineering challenge that requires hardware-software synergy. Every layer—chips, memory, OS, and models—must be redesigned to enable the smartphone to understand user intent and assist users technically. No smartphone-focused manufacturer would choose to dismantle everything and start from scratch. Especially regarding data, traditional smartphone manufacturers and emerging AI smartphones have opposing stances—for the former, ensuring user experience and data security remains paramount.

In advancing AI smartphones, traditional manufacturers are destined to take a conservative approach, limiting their innovation. If AI smartphones achieve a leap in intelligence, even industry giants like Apple and Huawei, with their deep technological and ecological barriers, may pale in comparison.

While winning or losing in the high-end market matters, in this new wave of technological transformation, Apple and Huawei must focus on more than just immediate success or failure.