Author｜Haotian

On August 2, 2026, Xiaomi's official online store revised its pricing, increasing the costs of models such as the Xiaomi 17, Redmi K90, and Turbo 5 series by 300-500 yuan.

Notably, this marks Xiaomi's second smartphone price hike this year. Earlier, on April 11, Xiaomi implemented its first price increase, with the REDMI K90 Pro Max rising by 200 yuan, while the Turbo 5 and Turbo 5 Max discontinued their New Year promotional offers. Subsequently, on July 6, Xiaomi initiated a second round of price adjustments, with the REDMI K90 and Note 15 series increasing by 200-400 yuan.

Analyzing Xiaomi's recent three price adjustments, a clear pattern emerges: the company has not hastily passed on all the increased memory costs to consumers. Initially, only mid-range and low-end products experienced price hikes, but recent adjustments have now extended to flagship smartphones.

This strategy is primarily because flagship smartphones, compared to their mid-range and low-end counterparts, boast higher profit margins and greater resilience to cost pressures. In May 2026, Lei Jun, Chairman and CEO of Xiaomi, stated, "Internally, we are employing various methods to enhance efficiency and absorb the resulting cost pressures rather than transferring them to consumers."

The recent price increase of the Xiaomi 17 series strongly suggests that memory prices have reached a level that exerts significant pressure on Xiaomi's flagship smartphones.

Given that Apple has adopted a similar strategy, leveraging its ecosystem advantages to mitigate the impact of memory price hikes, many netizens are concerned that the iPhone 18 series, slated for release next month, may also see price increases following the Xiaomi 17 series hike.

01

Apple's Dual Strategy to Combat Memory Price Hikes

If one were to identify a keyword for the smartphone industry in 2026, "price hikes" would likely be a top contender. Not only Xiaomi but also smartphone manufacturers like OPPO, Vivo, and Honor have raised their prices multiple times.

However, it is noteworthy that despite being positioned as a high-end brand and more readily accepted by consumers after price adjustments, the iPhone 17 series did not raise prices amid soaring memory costs. Instead, Apple even offered frequent discounts during shopping festivals.

Image Source: JD.com

For instance, in January 2026, Apple's official flagship store launched a New Year promotion, reducing the price of the iPhone Air by 2,000 yuan. During the 618 shopping festival, the iPhone 17 series saw across-the-board price reductions, with the standard iPhone 17 model dropping by 200 yuan and the iPhone 17 Pro by 1,000 yuan.

Apple's counterintuitive approach stems from its greater flexibility in both hardware and software dimensions, viewing the memory price hike crisis as an opportunity to expand its market influence in the smartphone sector.

From a hardware perspective, Apple can offset rising memory costs internally through large-scale procurement to build inventory, cost reductions in non-memory components, and the premium pricing power of the iPhone.

In the third fiscal quarter of 2026 (ending June 27, 2026), Apple's inventory reached $11.1 billion (approximately 75 billion yuan), up 94.74% year-on-year. In response, Apple CEO Tim Cook stated that existing inventory has partially mitigated the pressure from rising memory costs.

During the same period, Apple's gross profit margin for hardware products was 40.1%. After excluding the impact of approximately 2.5% in tariffs, it was about 37.6%, a slight decrease of 0.1 percentage points sequentially. Due to its relatively larger profit margins, the memory price hike has not imposed significant downward pressure on Apple.

Image Source: IDC

Amid widespread smartphone price hikes, the iPhone, with its stable pricing, appears to offer good "value for money," becoming a focal point for consumers. Data from IDC reveals that in the first and second quarters of 2026, Apple's smartphone shipments increased by 33.3% and 24.4% year-on-year, respectively, ranking second in both periods.

Compared to other Android smartphone manufacturers, Apple's advantage lies not only in the higher market acceptance of its high-end products but also in its integrated hardware and software development, with its service business offering broad profit margins.

In the third fiscal quarter of 2026, Apple's gross profit margin for its service business was as high as 75.6%. Leveraging hundreds of millions of hardware devices, software services such as the App Store, content subscriptions, and search engine entry points can easily achieve a profit leverage effect, contributing significant revenue to the company.

Although the gross profit margin of hardware products has declined under the pressure of memory costs, Apple's service business has continued to prosper thanks to the growth in iPhone shipments. In the third fiscal quarter of 2026, Apple's service business revenue reached $30.74 billion (approximately 207.6 billion yuan), up 12% year-on-year, accounting for 28% of total revenue and contributing 42% of the gross profit.

02

New iPhone on the Horizon, Price Hikes Seem Inevitable

If memory prices stabilize, Apple may continue to control iPhone prices to capture more market share.

Unfortunately, with the explosion of the AI industry and a surge in storage demand, memory prices are expected to rise further. Analysts at Jefferies predict that in the third quarter of 2026, memory prices will increase by 40%-50% sequentially, and by 30%-40% in the fourth quarter. In 2027, memory prices will continue to rise by 40%-45%.

"The current surge in memory chip prices leads me to believe that the industry is experiencing a once-in-a-century price hike," Tim Cook said. "We expect that in the September quarter (the fourth fiscal quarter of 2026), storage procurement costs will rise further, and the buffer provided by inventory will continue to weaken."

As is customary, Apple will launch its new iPhones in early September each year. The soaring memory prices will pose a significant challenge to the pricing of the iPhone 18 series, set to be released a month later.

Image Source: Google

Based on available online information, to avoid profit losses, Apple plans to delay the release of the relatively lower-priced iPhone 18 standard model until the spring of 2027. The autumn new product launch event in September 2026 will only introduce three models: the iPhone 18 Pro, iPhone 18 Pro Max, and a foldable iPhone.

Although the iPhone 18 Pro series and the foldable iPhone have higher base prices and can withstand a certain degree of memory price hikes, it is important to note that to enhance market competitiveness, the configurations of the new iPhones will be significantly upgraded, leading to a substantial increase in manufacturing costs.

It is reported that the iPhone 18 Pro series will be equipped with the A20 Pro processor featuring a 2nm process for the first time. According to a report by Cailian Press, the price of 2nm process wafers from TSMC will increase by 10%.

In addition, according to analyst Ming-Chi Kuo of TF International Securities, the main camera of the iPhone 18 Pro series will also introduce a variable aperture, with the average cost of lenses increasing by 50% compared to existing high-end 7P lenses.

Image Source: MacRumors

To balance the high manufacturing costs upstream, Apple has no choice but to raise the prices of its new smartphones.

On July 31, 2026, Pu Deyu, an analyst at GF Securities, posted on a social media platform that the iPhone 18 Pro and iPhone 18 Pro Max are expected to see price increases of $250-$300 (approximately 1,691-2,030 yuan). According to a report by Bloomberg Technology journalist Mark Gurman, the starting price of the foldable iPhone will reach $2,000 (approximately 13,500 yuan).

03

Smartphone Industry Under Pressure, Apple Seeks Relief with Leasing Services

As is well known, with rapid technological advancements, the smartphone industry has shown signs of performance surplus in recent years, and consumers' desire to upgrade their devices has been declining. Against this backdrop, the rapid rise in memory prices will further lead to a sharp decline in smartphone market demand.

Image Source: Counterpoint Research

According to a research report by Counterpoint Research, global smartphone shipments are expected to reach 1.08 billion units in 2026, down 13.9% year-on-year, hitting a new low since 2013.

Against this backdrop, many smartphone manufacturers have adopted more cautious supply chain strategies. In June 2026, Nikkei Asia reported that Xiaomi, OPPO, Vivo, and other smartphone manufacturers had notified their suppliers to lower their full-year shipment targets for 2026, with some brands reducing them by up to 30%.

Apple also faces similar challenges. On the one hand, the price-advantaged iPhone 17 has preempted some consumer demand. On the other hand, the high-priced iPhone 18 Pro series has a limited audience. Against this backdrop, it is difficult for Apple to maintain steady growth in its performance.

Apple's performance guidance shows that in the fourth fiscal quarter of 2026, the company's revenue is expected to grow by 9%-11% year-on-year, not only lower than analysts' expectations of 12.1% but also lower than the 16% growth rate in the previous quarter.

To alleviate the downward pressure caused by rising memory prices, Apple is working to lower the purchase threshold for consumers.

Image Source: Apple

In July 2026, Apple launched a product leasing service called Apple Upgrade in the United States, allowing consumers to lease iPhones, Apple Watches, Macs, and other devices for 12 or 24 months. After the lease term ends, users can choose to upgrade, buy out, or return the device.

Overall, the total cost of purchasing the same product through Apple Upgrade leasing and Apple Card installments is roughly the same.

Taking the 256GB version of the iPhone 17 Pro as an example, with a 24-month installment plan, the monthly payment for Apple Upgrade leasing is only $31.99 (approximately 216 yuan). If the user wants to buy out the device after the lease term, they need to pay an additional $331.24 (approximately 2,237 yuan). In contrast, the monthly payment for Apple Card installments is $45.79 (approximately 309 yuan), and the device is fully paid off at the end of the term.

A horizontal comparison reveals that the main advantage of the Apple Upgrade leasing service lies in its lower monthly payments, significantly reducing the purchase threshold for consumers and potentially stabilizing sales of iPhones and other hardware.

Similar to how the iPhone 17 attracted a large number of consumers with its price advantage, the Apple Upgrade leasing service is also expected to attract more users to purchase iPhones and other products during the era of rising memory prices, thereby driving up Apple's service business performance.

Whether it is the iPhone 17 series proactively absorbing the pressure of rising memory prices or lowering the purchase threshold for consumers through the Apple Upgrade leasing service, both essentially reflect Apple's consistent business logic—maintaining the user base of its hardware ecosystem through short-term profit concessions, thereby amplifying the long-term value of its service business.

However, it is important to note that Apple's previous business moat was primarily built on the closed loop formed by hardware, software, and services.

If AI technology redefines the way humans interact with devices and establishes new entry points and ecosystem rules, Apple's business moat will face the challenge of drying up.

For Apple, rising memory prices are only short-term operational pressures. How to prove its ecological value in the AI era is the key to determining whether it can continue to write its legend in the next decade.

Interactive Topic

What are your thoughts on the smartphone price hike trend? Are you considering purchasing the iPhone 18?

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