Huawei Technologies plans to raise smartphone prices amid a severe global memory cost surge, even as consumer demand in China softens.
Huawei Raises Smartphone Prices as Memory Costs Surge
Global electronics manufacturers face a structural cost shock as the rapid rollout of artificial intelligence infrastructure absorbs advanced memory production capacity. Huawei consumer business chief Richard Yu reported that the Chinese technology champion has seen an average increase of $200 in its smartphone costs. The company plans to join rivals in jacking up prices to counter rising memory expenses, though Yu noted the increases will remain moderate.
According to data from Counterpoint Research, smartphone memory prices rose more than 80% quarter-on-quarter in the second quarter of 2026. Memory now accounts for 30% to 40% of a handset’s bill of materials, up significantly from historical levels of 10% to 15%. This component squeeze forced major brands to implement simultaneous price increases across flagship and mid-range lineups.
“We’ll have to raise prices going forward, though it will be moderate, It’s hurting our profitability very badly.”
Richard Yu, consumer business chief at Huawei
Industry forecasts project that global average selling prices will climb from $467 in 2025 to $565 in 2026, marking a 21% jump that represents the steepest single-year increase on record. At the same time, IDC projects global smartphone shipments will fall 16.7% in 2026, with Android volumes declining by 21%. SK Group Chairman Chey Tae-won and other industry leaders have observed that enterprise-grade AI server demand absorbs the bulk of advanced memory production capacity, keeping consumer-grade supply constrained through at least 2027.
Retail Shelves and Supply Strategies Across Chinese Brands
Field visits to retail stores reveal that the price adjustments arrived abruptly. Store employees reported that price increase notices were distributed via messaging groups to display stores, leaving staff to inform customers verbally before new price tags could be printed.
Behind these retail shifts lies a sharp divergence in supply chain power. Industry reports indicate that Huawei secured long-term procurement agreements, whereas competitors remain locked in difficult negotiations. Balance sheet data corroborates Huawei’s strategic stockpiling.
Amid these component cost pressures, the entry-level segment faces a reckoning, with estimates that some 230 million smartphones priced below $200 will be wiped out by the end of this decade.
Foldable Devices Drive Huawei Smartphone Shipment Growth
Despite soft consumer demand in China, where weekly smartphone sales have declined by double digits year-over-year since July, Huawei expects its smartphone shipments to grow about 8% this year. Company leadership credits this resilience to the popularity of foldable devices. Following Apple’s entry into the foldable category, Huawei’s $1,650 Pura X Max recorded a 76% sales jump with 1.4 million units shipped, while the second-generation tri-fold Mate XT 2 starts at $2,980 with sales targeted past one million units.
Huawei is also advancing its proprietary software ecosystem. Devices sold in China have run on HarmonyOS since 2021, with user numbers projected to reach 100 million by the end of this year. The company plans to roll out HarmonyOS to replace open-source Android systems on devices sold outside China in the coming years, while also exploring overseas markets in Europe and the Middle East for its premium hardware and artificial intelligence chips.
For consumers across the region, these developments suggest that competitive smartphone markets may see less dramatic price competition than in recent years, leaving device makers to choose between absorbing mounting costs or passing them directly to buyers.
