smartphone market

Xiaomi launched its new flagship Xiaomi 17 and 17 Ultra smartphones at Mobile World Congress. Despite an 80-90% surge in memory chip prices due to supply shortages, Xiaomi has maintained the launch prices of these premium devices. Industry analysts suggest this strategy could be challenging for Xiaomi, as its sales volume is heavily reliant on mid-range devices, unlike Apple and Samsung which can leverage higher-margin premium sales. Diversification into its electric vehicle business provides a crucial revenue stream.

The global smartphone market faces its sharpest decline on record in 2026, with shipments expected to hit their lowest since 2013. This downturn is driven by a severe memory chip shortage, exacerbated by AI sector demand, which deprioritizes smartphone manufacturers. Component costs are rising, forcing price increases and potentially favoring mid- to high-end models. This situation may boost the used smartphone market and lead to longer replacement cycles, with a market inflection point anticipated in late 2027.

Global smartphone shipments are projected to decline by 2.1% in 2026, while average selling prices are expected to rise by 6.9%. This shift is driven by surging demand for memory chips, essential for AI technologies, which has led to component shortages and increased manufacturing costs. Entry-level phones are seeing significant bill of materials cost hikes, with further price increases anticipated. Larger players like Apple and Samsung are better positioned, while smaller manufacturers may struggle, potentially leading to component downgrades or a push towards premium models.

Omdia reports the Middle East (excluding Turkey) smartphone market rebounded strongly in Q3 2025, with shipments up 23% YoY to 15.1 million units. Growth was driven by demand for mid-tier 4G and affordable 5G devices. While Saudi Arabia saw a slight dip, UAE, Iraq and Rest of Middle East experienced strong growth. Samsung led the market; TRANSSION, Xiaomi, HONOR and Apple also saw gains. Omdia forecasts slower growth in 2026 due to rising component costs.

Honor Device Co., Ltd. has initiated its IPO on the A-share market, filing for guidance with the CSRC. The company restructured to a joint-stock entity in late 2024, a key step towards public listing. Shenzhen Zhixin New Information Technology Co., Ltd. holds a controlling stake. With the backing of multiple investors including China Mobile and China Telecom, Honor aims to fuel its strategic growth through public markets.

CNBC AI News reported on May 19 that Midea Group Chairman Paul Fang revealed Xiaomi’s 2024 strategic presentation during a leadership meeting, outlining three key goals: becoming the world’s top smartphone vendor within three years, entering the global EV top five within a decade, and securing a top-three position in China’s home appliance market. Fang questioned whether Xiaomi aimed to displace established players like Midea, Gree, or Haier, but emphasized traditional manufacturers’ enduring advantages in supply chains and brand equity. Despite skepticism, Midea’s strategy team analyzed 100,000+ words of Xiaomi research, acknowledging parallels with their own 2010s digital transformation, though confirmed no automotive manufacturing partnerships despite industry speculation.