Rising costs and a surge in mobile phone prices become inevitable! Can AI transformation be the key to breaking the deadlock?

Affected by the global increase in storage chip prices, the mobile phone industry is experiencing a new wave of price hikes.

Since 2025, explosive growth in AI servers has taken away a large portion of memory capacity originally used for mobile phone production, causing DRAM and NAND Flash prices to rise sharply, directly increasing the cost of core mobile phone components. Mobile phone manufacturers are forced to adjust prices to ease cost pressures.

OPPO Announces Price Increase

On the morning of March 10, OPPO was the first to release an announcement titled “Notice on Price Adjustments for Some Already Released OPPO and OnePlus Products.” OPPO stated that in response to rising costs of key mobile phone components, including high-speed storage hardware, starting March 16, prices will be adjusted for some already released products, including the OPPO A series, K series, and OnePlus phones.

Meanwhile, other major brands are also signaling price increases. Xiaomi CEO Lei Jun responded to the surge in memory prices, saying that the skyrocketing demand for AI has caused memory storage prices to soar, significantly impacting related businesses like mobile phones. Xiaomi is trying to absorb these costs internally by improving efficiency to reduce the difficulty for consumers to accept higher prices.

Additionally, media reports indicate that brands such as vivo, iQOO, and Honor are also about to enter a price increase phase.

According to research firm Counterpoint Research, the average selling price of smartphones is expected to increase by 12% year-over-year in 2026, reaching $414. The firm notes that the most significant price hikes are occurring in emerging markets such as Latin America, the Middle East, India, and other parts of Asia-Pacific, with average price increases exceeding double digits in these regions.

Due to rising storage prices, smartphone shipments have begun to decline. Data from the National Bureau of Statistics show that from October to December 2025, smartphone production decreased year-over-year by 2.6%, 9.1%, and 4.7%, respectively.

From the global market perspective, according to Omdia’s forecast, worldwide smartphone shipments are expected to decline by about 7% in 2026. This forecast is based on storage price assumptions for the first quarter of 2026, with expectations that price pressures and supply shortages will begin to ease in the second half of this year.

Industry Shifts Toward AI Phones

To cope with increasing market pressures, mobile phone manufacturers are adjusting their product strategies, shifting toward high-end models to boost profit margins.

Counterpoint Research reports that many OEMs (Original Equipment Manufacturers) are choosing to raise prices directly when launching new models or gradually stopping updates for entry-level products. These measures are expected to lead to a continued contraction of the low-end market.

In contrast, brands like Apple, Samsung, Huawei, and Google, with highly concentrated high-end product portfolios, are less affected by these changes. Their price increases mainly reflect the upstream cost transfer to end consumers.

Developing AI phones has become a key part of manufacturers’ transformation. The shipment volume of AI phones is expected to grow significantly in 2026. Leading manufacturers are launching new products, and the industry chain is rapidly developing.

Previously, Doubao partnered with ZTE to launch Doubao AI phones, Samsung released the Galaxy S26 series with AI features, and Apple introduced the entry-level iPhone 17e with AI capabilities. IDC predicts that in 2026, China’s new AI phone shipments will reach 147 million units, a 31.6% increase year-over-year, accounting for 53% of the overall market.

On the policy front, this year’s government work report proposed “creating a new form of smart economy.” During a briefing at the State Council Information Office, a spokesperson stated that in expanding large-scale applications, from hardware to smart terminals, policies such as old-for-new replacement support will continue, helping AI-related products reach more households. This provides clear policy support and development direction for the AI phone industry.

23 Stocks Under Institutional Research

According to Securities Times and Data Treasure, there are 98 A-share stocks involved in the AI phone industry chain, with an average stock price increase of 8.2% this year. Among them, Kexiang Co., Ltd. surged by 112.39%, and Han’s Laser, Jingce Electronic, and Huagong Tech all increased by over 50%.

Kexiang Co., Ltd. stated on an investor interaction platform that as an important supplier of PCB for smartphones, the company will seize the opportunities of the AI era, cooperating with relevant phone manufacturers and ODMs (Original Design Manufacturers) to upgrade toward AI phones.

As AI phone popularity continues to rise, concept stocks are attracting close attention from institutions. Data shows that 23 stocks have been researched by institutions this year, with Huaqin Technology, Ying Tang Zhikong, and Shunluo Electronics leading in the number of institutional visits, with 217, 197, and 174 visits respectively.

Huaqin Technology said on an investor platform that as a leading ODM in the smartphone industry, it will continue to strengthen strategic cooperation with global smartphone brands to maintain its position as a core supplier. The concentration of smartphone ODMs is also further increasing, and the company will continue to maintain its industry-leading advantage.

Ying Tang Zhikong mentioned on an investor platform that it is seeking to develop an 8-inch foundry production line for certain MEMS micro-mirror specifications, which has now entered the product R&D and process integration stages.

(Source: Data Treasure)