Source | Bohu Finance (bohuFN)

Duan Yongping, the iconic figure behind BBK Electronics, once famously said, 'People pay attention to us because of what we do, but what truly defines us is what we choose not to do.'

No company embodies this principle more resolutely than vivo.

Amid fierce market competition, most smartphone manufacturers frequently oscillate in product definition and market strategy. A sibling company once nurtured a top-five domestic chip enterprise but ultimately abandoned it; a competitor recently equipped all its new flagship models with privacy screens, triggering public backlash.

On one hand, vivo adheres to a 'latecomer advantage' approach, avoiding hasty decisions and allowing other companies to test the waters before entering industries, such as foldable screens. On the other hand, once a direction is chosen, execution remains steadfast—evident in the imaging capabilities of its high-end series and iQOO's dedication to gaming experience.

This approach has resulted in more stable market performance for vivo compared to its peers. Relying on the high-end X series, mid-range S series, mass-market Y series, and gaming-focused iQOO, vivo has consistently ranked first in domestic market share over the past few years. Even in the first quarter of this year, when domestic Android peers declined, vivo's domestic shipments rose 2% year-on-year.

Now, the situation is changing.

During this year's flagship model launches, vivo unusually fired the first salvo in marketing but achieved modest results. According to data observed by Weibo blogger RD, on the first sales day, the vivo X500 series (X500/X500 Pro Max) ranked mid-tier among flagship models from three brands, with sales between 30% and 40% of the previous generation's flagship series launched last year; the 16GB variant accounted for approximately 20% of total series sales.

In contrast, the iPhone 18 Pro series reached nearly 1,300K in SO (sales orders) within seven days of launch, approximately 115% of the iPhone 17 Pro series and 90% of the iPhone 17 series during the same period.

Under an unprecedented storage cycle, not only is the mid-to-low-end smartphone market shrinking, but Android manufacturers' familiar strategy of 'imaging-led, cost-effective foundation' is gradually losing effectiveness, leaving them with diminishing room to maneuver. Meanwhile, AI phones are entering a period of radical transformation, with Doubao unveiling its second-generation phone and OpenAI beginning to develop its own hardware.

This means that for vivo, finding a path forward is now as crucial as avoiding mistakes.

01 The Victory of Persistence

While we often group Honor, Xiaomi, OPPO, and vivo together, vivo lags behind Xiaomi in terms of brand strength.

On one hand, Xiaomi rivals Huawei in brand traffic, frequently trending on Weibo, a feat unmatched by the other three. On the other hand, leveraging its greater influence and user base, Xiaomi's flagship models also sell better.

According to data shared by RD, as of W37 (September 7–13, 2026), the Xiaomi 17 series, vivo X300 series, and OPPO Find X9 series had sold approximately 6.2231 million, 3.8067 million, and 3.0485 million units, respectively. Xiaomi clearly outpaced the other two.

Surprisingly, in the ultra-high-end segment, Xiaomi failed to maintain its lead—as of W37 (September 7–13, 2026), the Xiaomi 17 Ultra sold approximately 250,700 units, while the vivo X300 Ultra sold around 308,200 units during the same period.

Despite trailing in both traffic and brand strength, why did vivo outperform in the highest-priced segment?

A significant reason lies in its persistence in imaging. vivo entered the imaging arena relatively late. Around 2016, technologies like multi-camera setups, large sensors, and optical image stabilization matured, making imaging a battleground for high-end smartphones. It wasn't until 2017 that vivo decided to systematically increase its imaging investments.

However, vivo's advantage lies in its consistent and sustained commitment. In 2021, Yu Meng, then head of imaging, stated in a media interview, 'In the long race of imaging, our internal requirement is to aim for first place. Without this goal, there would be hesitation in investment and persistence.'

According to Lei Feng Network, when structuring a vivo smartphone, the camera module's position is prioritized first, decided by the imaging department, followed by other modules.

In 2020, vivo began collaborating with Zeiss to deepen its understanding of optics, color, and imaging. Simultaneously, it established an in-house imaging chip team. In 2021, vivo released its first-generation ISP chip, V1, enabling Android phones to approach the iPhone's video capabilities.

Moreover, as imaging involves an increasing number of technical aspects, vivo expanded its collaboration to broader fields, such as customizing products with Samsung and MediaTek. Its partnership with Zeiss extended beyond software like filters and lens packages to hardware, introducing T* coating and upcoming periscope zoom lenses.

This provided vivo with a unique competitive edge.

After the widespread adoption of full-screen displays, smartphone design reached a bottleneck. Apple could retain users through its integrated hardware-software ecosystem, while Android manufacturers relied on parameter stacking for cost-effectiveness. Beyond cost-effectiveness, vivo had imaging as a differentiator.

For example, in 2022, vivo became the domestic brand with the largest market share in the 3,500-yuan-plus price segment, second only to Apple. Another example is the teleconverter introduced in its previous flagship model. While competitors released it earlier, vivo was the first to mass-produce it, cementing the vivo X300 Ultra's reputation as a 'concert artifact ' (concert essential).

When we randomly interviewed users who switched to vivo, over 80% cited 'attractive photography' as their primary reason.

In a defined industry trend, setting clear goals and directions and adhering to them without deviation is vivo's path to success.

02 Cost Trade-offs

The massive demand for AI computing power has led storage manufacturers to shift capacity toward HBM, squeezing traditional DRAM and NAND production and causing prices to surge. In Q2, the price of the commonly used 16GB+512GB smartphone storage configuration rose by $212 compared to early last year, pushing storage's share of flagship phone BOM costs to 42%.

According to the latest memory industry research report by BofA Securities analyst Simon Woo, Q3 DRAM contract prices are expected to rise 20–30% quarter-on-quarter, while NAND flash memory prices will increase by over 15%, with price hikes persisting far longer than initial market predictions.

Not only are memory prices rising, but display panels are also quietly increasing. On September 11, Corning, the global glass substrate giant, announced a price adjustment of over 15% for yen-denominated display glass substrate products worldwide starting Q4. Subsequently, domestic panel giants like BOE and HKC followed suit, issuing price adjustment notices to downstream clients in mid-September.

Thus, price hikes have become standard practice for all smartphone manufacturers.

Among the new models released in September, OPPO's Find X10 series saw its starting price increase by 1,100–2,000 yuan compared to last year; Xiaomi's 18 Pro series starting price rose by 1,000 yuan from the previous generation; vivo's new flagship X500 series saw across-the-board price increases of at least 1,100 yuan; Apple's 18 Pro series increased by at least 1,000 yuan; and Huawei's Mate 90 series also raised prices by around 1,000 yuan.

When prices rise significantly, the price itself becomes the biggest selling point, severely testing product managers' strategies.

Some brands chose back screens and privacy features as new selling points, but the results were underwhelming. vivo opted for 2K screens and periscope imaging on its ultra-high-end model, with limited success. Due to cost considerations, the vivo X500 series even eliminated the 16GB RAM configuration for the standard and Pro versions, sparking such consumer backlash that vivo quietly reintroduced the X500 Pro and Pro Max 16+512GB and 16+1TB variants on e-commerce platforms just the next day.

Interestingly, Honor performed the best by playing it straight on pricing.

The Honor Magic9's 16GB+512GB version retailed for 5,499 yuan after national subsidies, with the Magic9 series starting at 4,499 yuan. The full-series price hikes were strictly controlled between 500 and 800 yuan, significantly lower than competitors' flagship models.

After the holiday, Honor's management eagerly shared its achievements on social media: in W40, Honor ranked among the top three brands in weekly market share and first in the Android camp, meaning it trailed only Apple and Huawei.

Some dealers noted that consumers with a 6,000-yuan budget now wonder whether buying the iPhone 17 series offers better value and longevity.

This indicates that during this unprecedented price hike cycle, as long as the subsidized iPhone 17 remains available, Android manufacturers' best opportunity lies in the subsidized 6,000-yuan price segment. When it comes to price, imaging leadership alone cannot persuade consumers to make a purchase.

This means vivo needs to explore other breakthrough strategies.

03 The Next Frontier for Smartphones

For all smartphone manufacturers, premiumization remains an eternal goal: using proprietary technologies to create industry-leading products that justify premium pricing. This requires sustained investment across three product generations and leadership from a flagship model.

However, during market growth periods, making such a commitment is challenging. In today's environment, where replacement cycles have lengthened and the industry continues to decline, the decision becomes even more difficult.

Nevertheless, a new opportunity is emerging.

Industry insiders define 2026 as the 'first year of AI agent smartphone proliferation.' On one hand, institutions widely predict strong AI phone shipments. IDC expects China's next-generation AI phone shipments to reach 147 million units in 2026, up 31.6% year-on-year, accounting for 53% of the total market and surpassing non-AI phones for the first time.

More importantly, starting this year, AI phones are transitioning from 'concept' to 'mainstream.'

In June, at OpenAI's Voice Hack Night event, a team demonstrated an 'Agentic operating system' for smartphones, breaking traditional APP ecosystems by eliminating the need for conventional apps and generating all interfaces instantly.

In September, the second-generation Doubao phone went on sale. Its design became more lightweight, featuring an AI button on the side. Users could activate different AI functions with single or double clicks, streamlining operations while addressing security and privacy concerns via fingerprint unlocking. ByteDance began assigning Doubao numerous tasks, such as hailing rides, booking flights and hotels across apps, searching for music and books based on user instructions, and even integrating with Feishu to summarize meeting recordings, generate PPTs, and create documents—effectively turning the phone into an office assistant.

From a technical standpoint, on-device models are evolving, enabling smartphones to handle increasingly complex AI tasks. Huawei pioneered the deployment of a total 30 billion-parameter, 2 billion-activated-parameter MoE (Mixture of Experts) full-modal large model on the Mate 90 series. Qualcomm, in collaboration with JieYue, Wulianghuo, and Jiangbo Long, implemented a 30 billion-parameter MoE model on the sixth-generation Snapdragon 8 Supreme platform. Qualcomm anticipates that next-generation agent-based AI devices could process up to 1 million tokens per day on-device.

AI phones represent a new battleground for all manufacturers, and vivo's current offerings remain insufficient.

vivo was an early mover in large models, establishing its AI Global Research Institute in 2017. In 2023, the X100 series debuted with the Blue Heart large model matrix, making vivo one of the first domestic manufacturers to mass-produce phones with self-developed large models and the first to publicly release on-device model weights. However, AI's prominence in vivo's external narrative has since waned. At the X500's product launch, vivo focused on imaging, with nearly no system-level Agent function demonstrations.

Even at this year's developer conference, vivo's approach remained relatively restrained.

At the system level, vivo presented two strategies: OriginOS 7, which maximizes AI capabilities on the Android platform by leveraging 6,000 atomic abilities from vivo's proprietary system apps to execute cross-app and cross-device tasks; and Blue River OS 4, which bets on vivo's future growth and is initially applied to devices like the vivo WATCH 6 and IoT products.

However, neither strategy places vivo in the driver's seat. On-device model performance depends on parameter scale and chipmaker cooperation, while vivo's Blue Heart 30B MoE on-device large model isn't expected to land on terminals until late 2028. Blue River OS requires sufficient developers and industry clients to build an ecosystem, a challenging feat given vivo's current wearable and IoT product scale.

Rising memory costs represent just the first wave of AI-driven disruption. To secure a ticket to the next era, vivo cannot rely solely on 'stability.'

Reference Sources:

1. 36Kr Finance: 'Memory Prices Haven't Dropped, Screens Are Rising—The 'Wait-and-See' Smartphone Consumers Lose in 2026'

2. LatePost: 'A Decade of vivo Imaging: Finding Its Own Methodology'

3. Huxiu: 'vivo Doubles Down on AI, But Can It Excel in Both Areas?'