When the topic turns to domestic smartphones, one can't help but be impressed by their remarkable achievements. Among the top 10 global smartphone brands, Chinese brands now dominate, claiming eight positions. Only Apple and Samsung remain as formidable competitors, with Chinese brands collectively holding around 60% of the global market share.

However, behind this success lies a strategy that has recently turned from a secret weapon into a heavy burden: the “model deluge” approach.

What exactly does this strategy entail? It involves flooding the market with a multitude of smartphone models throughout the year. The goal isn't for each model to be a blockbuster; rather, it's about ensuring that enough models succeed to drive overall sales volume.

In stark contrast, Apple adopts a premium strategy, releasing a limited number of high-quality smartphones annually. Meanwhile, domestic smartphone manufacturers flood the market with dozens of models each year, covering low, mid, and high-end segments, and frequently updating them. They are constantly either launching new products or preparing for their next release.

This approach has indeed paid off for domestic smartphone makers in terms of total sales. Low-end models have driven volume, while high-end models have established brand prestige. Although profit margins are thinner, they have managed to survive and even thrive to some extent.

However, by 2026, this strategy will no longer be sustainable.

The significant surge in memory chip prices has drastically altered the cost structure of smartphones. Memory chips have now become the most expensive component, with costs skyrocketing by four to five times.

As a result, many original low-end models have become unviable. Selling them in large quantities now leads to greater losses. If prices are raised too high, consumers will balk, effectively turning low-end models into mid-range ones. Conversely, if prices are reduced too little, manufacturers will still incur losses.

This predicament isn't limited to low-end models; mid-range models are also facing the same challenge. Costs have easily risen by 500 yuan, gradually pushing mid-range models into the high-end category.

Furthermore, under the “model deluge” strategy, smartphone profits are already razor-thin. The design and molding costs for each model are substantial, and the more models there are, the higher these costs become. This makes the already limited profits even more unpredictable and volatile.

Therefore, we are witnessing a significant shift in 2026. Domestic smartphone manufacturers are slashing product lines, particularly abandoning low-end models. Simultaneously, sales have plummeted, and so have profits.

In contrast, Apple and Samsung, which adhere to a premium strategy, have seen their sales increase and have been relatively unaffected by the memory chip price hike.

Looking ahead, the entire smartphone industry may face a major reshuffle in the face of soaring memory chip prices. The traditional logic of domestic smartphones relying on low prices and high volume no longer holds water. As for how these domestic smartphone makers will adapt and succeed in the future, only time will tell.