Are 1,000-yuan smartphones about to disappear? OPPO officially announces price hikes, and the reasons behind it are very realistic

Source: 21st Century Business Herald Author: Luo Yiqi

Rumors of phone price hikes are gradually coming true.

On March 10, OPPO announced on its official online store: Due to rising costs of several key mobile components, including high-speed storage hardware, after careful evaluation, the company has decided that starting from 12:00 a.m. on March 16, 2026, OPPO will adjust the prices of some already released products.

It is reported that the affected products include OPPO A series, K series, and OnePlus, excluding OPPO Find series, Reno series, and OPPO Pad series.

It’s clear that the models announced to raise prices first are in the lower price range. E-commerce platforms show that A and K series products are roughly in the 1,000 to 2,000 yuan price range.

This essentially reflects the ongoing increase in storage costs, which has the greatest impact on models priced around a thousand yuan, forcing phone manufacturers to respond.

Earlier this year, storage industry insiders told the 21st Century Business Herald that amid the continuous sharp rise in upstream storage chip prices, domestic storage manufacturers are trying to maintain demand from Tier 1 (top-tier) mobile clients, but shipments of phones in the 1,000 yuan price range are being significantly downgraded by manufacturers. “In the current storage shortage, we predict the mobile phone market will experience a ‘big washout’.”

The trend of phone price hikes may just be beginning. Several third-party agencies forecast that the continued rise in storage chips will likely put pressure on the global mobile phone market this year.

This also means that if manufacturers cannot find differentiated competitive points in the high-end smartphone market at higher price points, they will face significant competitive pressure this year.

Phone Price Hikes

Currently, OPPO is the only manufacturer to officially announce a targeted price increase, and there is a buffer period for consumers between the announcement and the actual price hike.

However, OPPO is not the only company raising prices this year. In fact, in February, Samsung launched its new Galaxy S26 series, which was priced about 1,000 yuan higher than the previous generation.

It’s important to note that Samsung is a core supplier of storage chips for many phone manufacturers. Unofficial market reports suggest that Samsung Electronics has been continuously changing storage supply and payment terms this year, possibly requiring phone makers to pay additional premiums based on storage price fluctuations, even if they have supply agreements.

Samsung’s price increase for its new phones indicates that even within the group, relationships do not allow Samsung Electronics to give Samsung phones a “back door,” and the price hike burden falls on “partner manufacturers.”

This has become an unavoidable common phenomenon. Redmi product manager Hu Xinxin previously analyzed on social media: Upstream memory/chip prices surge, leading to passive price increases for phones; these price hikes shrink market demand significantly; reduced demand further increases the per-unit cost. “For phone manufacturers, it’s a ‘ghost story’ series,” she said.

Xiaomi Group founder Lei Jun also recently said in an interview that “due to the surge in AI demand, memory storage chips are severely in short supply today, so over the past year, memory chips have indeed skyrocketed, putting great pressure on our mobile and related businesses. We are exploring various ways to reduce the difficulty for consumers to accept these changes.”

Xiaomi President Lu Weibing also mentioned in an interview that in the first quarter of this year, storage chip prices were nearly four times higher than in the first quarter of last year.

Behind this round of price hikes is the global expansion of AI infrastructure, which is squeezing the supply in the consumer electronics industry.

In the second half of 2024, the storage industry remains polarized in demand, with manufacturers facing obvious shipment pressures, leading to overall downward pressure on storage prices.

For the three major DRAM manufacturers, continuing to operate storage chips at a loss is unrealistic, so they are pushing for reduced production, especially decreasing NAND Flash chip capacity.

The turning point is expected in 2025, when AI companies like OpenAI and US-based cloud service providers actively promote AI infrastructure development. HBM (High Bandwidth Memory) products related to AI servers are central to this. Manufacturers are willing to pay higher prices for these products, which can bring high gross margins to storage suppliers, directly squeezing terminal storage capacity for consumer electronics.

Although some storage manufacturers are pushing for capacity expansion, industry insiders told the 21st Century Business Herald that it typically takes 18-24 months from purchasing new equipment to mass production. Even if new capacity is started in the second half of 2025, it will not be able to supply effectively until 2027, making short-term supply gaps difficult to fill.

A report released late last year by research firm Counterpoint Research shows that the storage market has entered a “super bull market,” surpassing the peak of 2018. It predicts storage prices will soar 40%-50% in Q4 2025; and again increase 40%-50% in Q1 2026.

In early March, the firm updated its forecast, estimating that by Q2 2026, prices for mobile LPDDR4/5 will reach nearly three times the levels of Q3 2025, reflecting unprecedented supply pressure.

Chief analyst Wang Yang said, “We expect this impact to last until the second half of 2027. Low-end smartphones may be most affected, especially as LPDDR4 supply shrinks faster than expected. OEMs have responded by delaying launches, streamlining product lines, and sacrificing specifications. We also observe that some Android OEMs have already raised product prices by 10%-20% in January 2026.”

Stress Test

OPPO’s decision to lead price increases on mid- and low-end models like the A and K series, while not yet announcing hikes for the higher-end Reno and Find series, indicates that the most vulnerable to storage chip price increases are models around the 1,000 yuan mark.

Previously, OPPO announced that its independent brand realme, spun off from its ecosystem, would return to OPPO. This is seen as a response to rising storage chip costs.

Although realme’s presence in the domestic market isn’t very high, it has been growing rapidly overseas with high cost-performance and unique design features. During the storage chip downturn, large memory and fast charging were early selling points for realme.

However, the uncontrollable trend of rising storage chip prices now clearly cannot support realme’s independent market competition.

This is fundamentally determined by the cost structure of smartphones in the 1,000 yuan price segment.

An industry insider told the 21st Century Business Herald that, simply calculated, by the end of 2025, the overall cost of a smartphone—including NAND and DRAM chips, modules, screens, and PCBs—will approach $90-$100, and with other R&D, marketing, and component costs, it will be very difficult for a phone priced around 1,000 yuan to fully cover costs.

“Therefore, it’s better to collaborate with upstream storage manufacturers to provide higher-spec storage products, and focus more on phones around 2,000 yuan or higher, where profit margins are more feasible,” the insider said. It’s not hard to foresee that in 2026, low-end phones and brands focusing on this segment will face significant pressure. “Storage price hikes and shortages are expected to cause a big washout in the industry.”

“This is a price increase magnitude I haven’t seen in over a decade,” the insider told us. Their strategy for mobile clients is simple: retain Tier 1 customers, as these have stronger product competitiveness and relatively stable shipment volumes. Even if the overall market fluctuates, these major clients can maintain relatively stable storage demand.

The impact on mobile companies’ operations is already evident. Transsion Holdings’ 2025 performance forecast shows an expected net profit attributable to shareholders of 2.584 billion yuan, down 53.43% year-on-year. The company cited market competition and supply chain costs, with rising storage component prices, as reasons for the decline, along with increased R&D expenses and efforts to expand markets and promote branding.

In February, Meizu announced it would suspend new hardware R&D projects for domestic phones and actively seek third-party hardware partners, with no impact on existing operations. This reflects how small but refined companies are losing bargaining power in the face of ongoing supply chain price hikes and are forced to shift strategies.

Meizu’s China CMO Wan Zhiqiang stated at a public event in January that since Q4 last year, the surge in memory prices has been a huge shock to their business plans. “Many manufacturers considered launching Air models, but ultimately only Apple and Huawei did,” he lamented, also announcing the cancellation of the Meizu 22 Air launch.

It’s easy to predict that, with flagship models from Apple and Samsung already raising prices, no other manufacturer’s flagship can remain unaffected.

Industry analysts generally expect that phone makers may opt to downgrade configurations, such as using previous-generation main chips or imaging components, to balance costs, and consider some price increases.

This also means that under the ongoing storage chip shortage, the smartphone market will face significant pressure.

Research firm IDC forecasts that global smartphone shipments will decline 12.9% in 2026, with revenue down 0.5%. It expects a 1.9% growth in 2027, and a rebound to 5.2% in 2028.

The firm predicts that storage supply challenges will persist throughout 2026 and may extend into 2027. “Although we expect the pace of storage price increases to slow in the second half of this year, prices will continue to rise and stay high. Based on current assumptions, our model predicts that prices will not return to 2025 levels during the forecast period.”

For mobile manufacturers, this is no longer just a supply chain cycle fluctuation. If product competitiveness, brand strength, and overall service capabilities cannot keep pace with the rising prices, their products may face a “price without demand” situation, further impacting overall market performance. If the scale effect of smartphones is affected, they will lose bargaining power in the supply chain.

A harsh smartphone competition will quietly begin in 2026.