• Memory costs for low-to-mid-end smartphones have skyrocketed to exceed 40%-50% of the total BOM due to a surge in demand for AI server memory. 
  • As a result, major Chinese smartphone OEMs have been forced to increase prices. OPPO, vivo and Xiaomi have raised prices by CNY 200-CNY 500 for their smartphones. 
  • As supply chain vertical integration capabilities emerge as a key competitive variable, Huawei, which has secured its own chips and domestic supply chain, remains relatively stable, whereas brands relying on the global market have shown vulnerabilities. 
  • With Meizu halting its smartphone business and ODM shipments projected to decline more than 20% by 2026, there are signs that the low-cost smartphone market’s business model is structurally collapsing. 


Based on past sales trends, the Chinese Labor Day Golden Week isn’t typically a major sales event, but it serves as an important benchmark. Most Chinese manufacturers choose to launch their new products before May. From March to April, they typically refresh their non-flagship entry-to-mid-range product lines, while also continuing the flagship series released in the previous Q4, such as Ultra versions. The May Day holiday, however, serves more as a specific milestone – it marks the start of clearance of old inventory and the beginning of volume sales for Q1’s new products. For brands entering this window, it marks the transition from the sales slump of March and April in Q1 to the volume growth of Q2. At this juncture, the expectation is for acceleration, not margin compression, an element that has recently been introduced but does not align with the original narrative.