Mobile phone manufacturers have collectively raised prices, with increases ranging from 200 yuan to 1,000 yuan.
2. Thousand-yuan phones are being massively shifted to the Southeast Asian market
2027 may be the year with the most severe chip shortage
In September, the global mobile phone industry is experiencing an unprecedented "ice and fire" phenomenon.
On one hand, the market is abuzz with the upcoming releases of new devices, with the Huawei Mate 90 series potentially being the first to feature a new Kirin chip based on the "TSMC's law", and Apple's first foldable-screen iPhone finally making its debut. On the other hand, the industry is facing a harsh winter, with global shipments expected to plummet 16.7%, prompting smartphone manufacturers to initiate another round of collective price adjustments, with increases ranging from 200 yuan to 1,000 yuan.
The phenomenon of "selling less but rising more" stems from the systemic crisis triggered by upstream storage chip issues.
Sources in the storage industry revealed to IT Times that mobile phone manufacturers are in collective negotiations with domestic and foreign storage chip manufacturers, with Huawei possibly having already signed a long-term agreement with fixed prices and quantities.
Another contender about to enter the market is the smart satellite phone. The Doudou Phone, the world's first AI smart satellite phone jointly developed by ZTE Nubia and ByteDance, has obtained the Ministry of Industry and Information Technology's network access license and will be available for sale in September; according to IT Times, another smart satellite phone, the STEPX Neo, will also be launched in the second half of this year.
Mobile phone manufacturers are going all out to attract "thrifty" consumers to upgrade their devices.
Smartphones See Collective Price Hike
Surges by Up to 1000 Yuan
"Before the new phones are released in September, the old models would usually be discounted, but in the past few days, I've been looking at a Huawei phone and it's actually increased in price by 1,000 yuan." Like most consumers, Mr. Lu, who was planning to upgrade his phone before the new models arrive in September, feels he's been badly let down.
On September 1, Huawei, Xiaomi, and Honor almost simultaneously announced price hikes for their main models, with single increases ranging from 200 yuan to 1,000 yuan. The Huawei Mate 80 series saw the largest increase, with the starting price of the Mate 80 rising by 800 yuan and the starting price of the Mate 80 Pro Max rising by 1,000 yuan. After the price adjustment, the 16GB+1TB version of the Mate 80 Pro Max is priced at 9,999 yuan, successfully entering the 10,000-yuan flagship tier. Xiaomi's REDMI K90 Ultimate Edition was increased by 400 yuan, and the REDMI Turbo 5 Max was increased by 200 yuan. The Honor Magic 8 series saw a price increase of 300-500 yuan, with the starting price of the series rising to 4,799 yuan after the adjustment.
So far, domestic mobile phone manufacturers have all officially announced price increases, and the focus in September has shifted back to Apple: will the iPhone be priced higher? The answer is almost certain, it's just that the price increase has yet to be confirmed.
According to calculations by TechInsights, in order to maintain a gross margin of around 47%, the price of the iPhone 18 Pro would need to be increased by approximately $270, and some media outlets have also predicted that the domestic price of the iPhone 18 Pro series will increase by around 1,000 yuan.
Since the start of 2026, China's mobile phone market has undergone multiple rounds of price adjustments.
In January 2026, several mobile phone manufacturers successively adjusted the prices of new models, with the same storage version of new models being around 500 yuan more expensive than the previous generation, but the prices of old models had not yet increased. In March 2026, OPPO initiated the first round of price increases for domestic mobile phones, with an official announcement on March 10 that it would adjust the prices of some old models that had already been released, starting from March 16. The A series would see a price increase of at least 300 yuan, with high-memory versions increasing by 500 yuan, and the overall price increase ranging from 300 to 500 yuan.
On the eve of 618, several mobile phone distributors and storage manufacturers interviewed by IT Times predicted that 618 would be the "bottom-fishing window" for mobile phones this year. Before the start of the new semester, reporters visited mobile phone and computer markets, where sales staff were shouting: this is the last chance to buy at a discount, prices will rise after the semester starts.
Consumers had grown numb to similar promotional rhetoric, but unexpectedly, on September 1, mobile phone manufacturers indeed launched a wave of price hikes.
According to Omdia's latest research, the global average selling price of smartphones is expected to rise from $467 in 2025 to $565 in 2026, a 21% increase that is a historic high.
Smartphone Manufacturers Advance Collective Bargaining
Huawei May Have Signed Long-Term Agreement
AI servers are "cannibalizing" storage chip production capacity, resulting in a shortage of consumer-grade storage chips and a surge in prices, which has pushed the mobile phone industry into "the most severe moment in nearly a decade". According to Counterpoint data, in the second quarter of 2026, the price of smartphone memory increased by over 80% quarter-on-quarter, and the proportion of storage chips in the material cost of mobile phones has skyrocketed from 10% to 15% in the past to 30% to 40%.
Mobile phone manufacturers are advancing collective negotiations with domestic and foreign storage chip manufacturers, and Huawei is likely to have secured a long-term agreement with price and quantity guarantees, but other manufacturers such as Xiaomi, Vivo, OPPO, and Honor are facing more difficulties.
As inventory depletion reaches a critical point, locking in replenishment prices becomes a necessary choice. Huawei's 2026 semi-annual report also reveals a surge in inventory value. As of the end of June, Huawei's inventory balance stood at 277.494 billion yuan, up 82.451 billion yuan from 195.043 billion yuan at the end of last year, representing a 42.3% increase. In the first half of the year, "cash paid for goods purchased and services received" rose from 314.315 billion yuan to 425.226 billion yuan, with an additional outlay of over 110 billion yuan.
Price increases have suppressed market demand, while shrinking demand has driven up smartphone production costs, leaving manufacturers with no choice but to maintain current prices. "Storage companies will prioritize fulfilling demand from the enterprise market, and this price surge will last at least until 2027," said the storage industry insider. "The consumer market will be satisfied later, and prices will remain high until 2028." The insider noted that this prediction has become a consensus in the industry and is the most optimistic forecast.
Previously, IDC had forecast that the storage chip price hike cycle would last at least until the end of 2027, and SK Group Chairman Chey Tae-won also warned that 2027 may be the year with the most severe shortage of storage chips.
To make matters worse, Qualcomm also announced that it will raise the prices of its entire line of chips starting in September, with a double-digit increase. This has directly disrupted the pace of smartphone manufacturers' releases and sales. Previously, according to media reports, Xiaomi, OPPO, and vivo had already lowered their 2026 shipment targets by as much as 30%. However, the downward adjustment is still increasing, with several digital bloggers recently revealing that the planned production of flagship machines by multiple manufacturers has been cut by 30% to 50%.
Counterpoint predicts global smartphone shipments will decline by approximately 14.3%, while IDC's data is slightly higher, at 16.7%, with Android shipments expected to drop 21%.
Smartphones under $150 enter overseas markets
AI Becomes New Bargaining Chip
Due to the impact of rising costs in the industry chain, low-priced thousand-yuan phones are sold at a loss, and manufacturers have no choice but to lower their production and shipment targets. Many distributors have stopped selling traditional low-priced thousand-yuan phones, and this type of model is about to disappear, according to a mobile phone distributor.
Thousands of low-end phones are being shifted en masse to overseas markets in Southeast Asia, Africa, and elsewhere. In July, realme announced it would suspend its Chinese operations and focus all its resources on cultivating overseas markets.
Vietnam and India's mobile phones were originally more expensive than those in China, and Chinese mobile phone brands in overseas markets have not seen significant price increases yet, but it's estimated that this price surge in China will affect overseas markets in one or two months, as most raw materials come from China and Indian and Vietnamese factories are mostly used for assembly, said Yang Shucheng, secretary-general of the China-India-Vietnam Electronics (Mobile Phone) Enterprise Association.
In addition to increasing its presence in overseas markets, AI may be another trump card during this downturn.
On September 1, alongside news of mobile phone price increases, the world's first AI smart somatosensory phone obtained the Ministry of Industry and Information Technology's access permit. ZTE officially announced that the NaviX Ultra, a "bean phone" jointly developed by Nubia and ByteDance, will be available for sale in September.
Additionally, insiders revealed to IT Times reporters that Jieya Star's smart phone, STEPX Neo, will also be launched for sale in the second half of this year. In July, STEPX Neo and Dounai Phone 2.0 appeared together at the World Artificial Intelligence Conference.
However, for edge AI, traditional mobile phone manufacturers are less enthusiastic than AI companies, as the entire mobile phone market has been dragged into a "cost tsunami" triggered by storage chips, squeezing investment in AI technology research and development.
Tuo Chip-powered phone makes its debut
Growing Pains Accompany Rising Yield Rates
Even in the midst of a downturn, there are always people preparing for the arrival of spring, although they will still have to endure the growing pains of the budding phase before spring actually arrives.
The world's first mass-produced smartphone chip to fully implement "Moore's Law" will be a crucial battle for Huawei to achieve performance breakthroughs through architectural innovation under the constraints of advanced process limitations.
Manufacturers will use the high profit margins of flagship models to offset the increase in unit costs caused by yield loss, while mid-to-low-end models will use mature chips to guarantee shipment volume and cash flow, which is the most profitable approach during a period of capacity shortage, explained Tian Feng, director of Kuai Si Man Think Tank and strategic consultant for OpenHarmony. The overall yield of multi-layer stacked chips is equal to the product of the yield of each layer and the bonding yield. Assuming a single-layer yield is maintained at around 90%, after two to three layers of stacking, plus the yield loss due to silicon via hole alignment, the overall yield may drop to around 70% or even lower. This non-linear decline is a cost variable that is easily underestimated by outsiders but is most keenly felt by engineering teams.
This will be a costly and protracted game.
When the storage chip industry transitioned from 64-layer to 128-layer 3D NAND, the industry as a whole experienced a trough in yield rates lasting around half a year to a year and a half before gradually climbing to a mature curve. It is likely that logic chips will retrace this learning curve when they first introduce a similar 3D stacking concept, with the only difference being the length of the climb.
In July this year, the V2 version of "Time Scaling Theory for Multilevel Electronic Systems" (referred to in the industry as "Tuo's Law") was released on ChinaXiv, the Chinese Academy of Sciences' preprint platform for scientific and technological papers. Compared to the V1 version released on May 25, this version adds a large number of engineering implementation details, quantitative measurement data, and product evolution routes.
In the V2 version of the "Tuo's Law" paper published by Huawei's director and president of the semiconductor business unit, He Tingbo, IT Times reporters found an important detail: the paper publicly disclosed for the first time the development codes and progress of the next four generations of Kirin chips. Both Kirin 2026 and Kirin 2027 have been marked as being in the Silicon (post-silicon verification) stage, which means they have completed tape-out and passed post-silicon measurement verification, crossing the technical threshold for mass production. Meanwhile, Kirin 2028 and Kirin 2029 are still in the Pre-silicon (pre-silicon design) stage, with preliminary architecture pre-validation design already completed.
Several distributors expect the price of Huawei's new Mate 90 series to also be increased. The technical threshold for mass production of "Taoxin" chips has been overcome, and the remaining challenge is to convince consumers that it is worth buying.
The improvement in mobile phone performance has become severely excessive in dealing with daily practical scenarios, while the price increase is a more perceivable change. This will be a necessary growing pain for "Tuo Chip" phones born in the cold winter.
Typesetting by Ji Jiaying
Photo/Interviewee of IT Times
Source: IT Times public account vittimes