Storage Shock Forces China’s Smartphone Makers to Break a Taboo on Price Rises

OPPO has become the first major handset brand to publicly announce price increases on already-selling smartphones, underscoring how a sharp surge in memory costs is now pushing even mass-market models beyond what vendors can absorb.

In a statement released at midday on March 10, OPPO said it will raise prices for selected OPPO and OnePlus products from 00:00 on March 16, citing higher costs for key components including high-speed storage. The adjustment covers mainly mid-to-low end devices in the OPPO A and K series as well as OnePlus models, and excludes the flagship Find X line, the mid-range Reno series and the OPPO Pad tablet range.

The move lands as market researchers warn that memory inflation is reshaping smartphone bill-of-materials economics. Counterpoint said entry-level devices are taking the biggest hit, with memory now consuming an unusually large share of the total component budget—raising the risk of short-term losses for brands that rely on low-end models to build market share.

Executives at Xiaomi have also intensified warnings that the cost cycle may last years, while recent flagship launches from Samsung and Apple have already shown notable price moves in higher-end segments. For investors and supply-chain players, the key question is no longer whether prices rise, but how quickly brands cut features, narrow product lines or shift demand toward higher-margin devices.

Entry-level phones take the first hit as memory consumes the BOM

Counterpoint said the memory price spike in the first quarter of 2026 is set to trigger a structural shift in smartphone bills of materials, with low-end models suffering the most—consistent with OPPO’s decision to adjust prices primarily on its entry-to-mid tiers.

In its analysis, Counterpoint estimated that first-quarter memory increases alone drove more than a 20% quarter-on-quarter rise in overall BOM costs. To protect margins, vendors are expected to simplify hardware specifications and streamline product portfolios. “In 2026, smartphone price increases are unavoidable,” the firm said, arguing that traditional cost-down tactics are unlikely to offset the scale of the shock.

Counterpoint’s Storage Price Tracking Report showed that in the first quarter of 2026, DRAM prices rose by more than 50% quarter-on-quarter, while NAND flash prices jumped by more than 90%. For a typical low-end configuration such as 6GB+128GB, Counterpoint calculated that memory inflation could lift total BOM costs by about 25% sequentially, with storage-related components accounting for more than 43% of the entire BOM.

The squeeze is less uniform further up the ladder, but still material. Counterpoint said mid-range devices—where configurations are more varied—will see the cost share of DRAM and NAND rise to about 14% and 11% in the first quarter, then to 20% and 16% in the second quarter. Flagship phones face a double burden: memory inflation plus pressure from higher costs of next-generation 2nm flagship system-on-chip processors. By the second quarter, Counterpoint expects memory’s share of BOM for flagships to rise to roughly 23% for DRAM and 18% for NAND.

Counterpoint senior analyst Shenghao Bai warned that brands leaning on entry-level devices to expand share may face short-term loss risk in 2026. The likely responses, he said, include trimming product lines—reducing low-end shipments—and cutting non-core specifications to compensate for higher costs elsewhere. Even so, Bai argued the magnitude of the storage shock means such steps may be “a drop in the bucket,” projecting that high-end flagship retail prices could rise by US$150 to US$200.

Xiaomi management warns of a multi-year cycle as pricing pressure spreads

The impact is not confined to one brand or one product category. At the recently concluded Mobile World Congress, Xiaomi Group President Lu Weibing said the current storage upcycle is likely to be long, potentially lasting until the end of 2027—nearly three years—which he described as unprecedented.

Lu said first-quarter 2026 quotations were about four times year-ago levels. A storage component that cost roughly RMB 30 (US$4.2) at the trough has climbed to around RMB 120 (US$16.8), he said, adding that “no one is spared” and the broader consumer electronics industry is being affected.

Xiaomi founder and chief executive Lei Jun told China Newsweek that for a complete vehicle, memory-driven cost increases could be in the range of RMB 4,000 to RMB 5,000 (US$560 to US$700), while average smartphone costs could rise by RMB 100 to RMB 200 (US$14 to US$28) per unit. Lei said the entire handset industry is under heavy pressure.

Those comments frame OPPO’s decision as less an outlier than an early, unusually explicit acknowledgement of an industry-wide constraint: when core components reprice rapidly, even large brands must either lift retail prices, accept margin compression, or cut hardware value in ways that could weaken competitiveness.

A broader consumer electronics reset: exits, public price moves and a narrower playbook

The storage shock is already reshaping corporate decisions and product strategies. Xingji Meizu has announced it is suspending Meizu’s in-house smartphone hardware development business, citing—among other factors—the memory price surge that made new products difficult to commercialize.

OPPO’s announcement also breaks with a common practice of adjusting prices quietly. In December 2025, Xiaomi raised prices on some tablets by RMB 100 to RMB 300 (US$14 to US$42) without issuing a formal public notice, according to the material provided.

Meanwhile, brand-new flagship launches are showing clearer pricing signals. Samsung on Feb. 26 released its S26 series, becoming the first global handset maker to launch a 2026 flagship. The starting prices of the standard and “Plus” models rose by RMB 1,000 (US$140) versus the previous generation, while the top-tier variant’s starting price increased by RMB 300 (US$42), with storage costs seen as a major contributor.

Apple has also reflected divergent pricing across its lineup. The company introduced iPhone 17e and MacBook Neo models positioned at “3,000-yuan level” pricing, but its high-end MacBook Pro range saw price increases of more than RMB 2,000 (US$280) for certain configurations, according to the material.

With IDC and Counterpoint expecting memory inflation to remain a long-running challenge, the room for maneuver is narrowing: raise prices, reduce specs, or cut exposure to low-end volume. OPPO has now chosen the most transparent option—suggesting that, in 2026, even the industry’s traditional price sensitivity may be giving way to a new cost reality.