Smartphone Market Shake-up: Huawei & Apple Thrive as Prices Rise, Xiaomi Drops Out of Top Five

The new market landscape | DingJiao One

Storage prices surge, and the leaderboard gets reshuffled.

By DingJiao One | Author: Jin Yufan | Editor: Wei Jia

Recently, consumers looking to buy a new phone may have noticed: smartphones are getting more expensive.

It's not just because manufacturers "want to earn a bit more" — the cost pressure from rising storage prices has directly disrupted the market order.

In mid-April, Omdia and IDC released their reports on China's smartphone market for the first quarter of 2026: Huawei ranked first, Apple second, OPPO and vivo third and fourth respectively.

The disagreement came at fifth place. Omdia showed Xiaomi in fifth with 8.7 million units shipped; IDC placed Honor in fifth with 8.9 million units, leaving Xiaomi out of the top five. Ranking discrepancies between the two firms have occurred before, but despite minor statistical differences, both reports indicate that among leading vendors, Xiaomi suffered the steepest year-on-year decline this quarter.

Rewind to one year ago: in Q1 2025, Xiaomi shipped 13.3 million units, reclaiming the top spot in the domestic market after a decade. Lei Jun posted multiple Weibo messages expressing gratitude. A year later, the landscape has changed: Huawei and Apple gained share while Xiaomi saw a dramatic drop.

The global market is also reshuffling. IDC data shows that global smartphone shipments in Q1 2026 reached 289.7 million units, down 4.1% year-on-year — the first global decline since mid-2023. Samsung returned to the top spot globally (62.8 million units); Apple came second (61.1 million units). Xiaomi held onto third place (33.8 million units), but its 19.1% year-on-year decline was the largest among the global top five. OPPO and vivo ranked fourth and fifth.

The disruptive variable is memory chips. In Q1, DRAM (phone RAM) contract prices rose by 90%, while NAND Flash (storage) increased by 50-60%. Storage already accounts for a significant portion of smartphone BOM costs, and faced with such a steep rise, every manufacturer had to respond.

Who can absorb costs, who is forced to cut volumes, and who shifts resources overseas — these factors will determine the market direction in 2026.

01. Huawei & Apple Smile at Price Hikes, Xiaomi Takes Aggressive Cuts

Facing storage price increases, smartphone vendors generally adopt one of three strategies: raise prices accordingly, absorb the costs themselves, or reduce shipments to protect margins.

In Q1 2026, Huawei and Apple chose not to raise prices, Xiaomi deliberately cut volumes, while OPPO and vivo went with a middle-ground approach.

Let's start with the "no-increase (or even price reduction)" camp.

Huawei shipped 13.9 million units in China during Q1, up 7% year-on-year. The Mate 80 series and nova 15 series were priced the same as their predecessors, with the Mate 80 standard edition starting at RMB 4,699 — even lower than the previous Mate 70 series (RMB 5,499).

At a time when rivals had to raise prices, Huawei attracted price-sensitive consumers who still wanted mid-to-high-end devices. An industry source involved in channel research noted that the Mate 80 series has been selling well since late 2025, and Huawei's store replenishment pace in Q1 significantly outpaced its competitors.

Apple not only kept prices unchanged but effectively offered "discounts," relying on its all-premium product mix and strong supply chain bargaining power.

In Q1, Apple shipped 13.1 million units in China, posting the fastest growth (up 42% year-on-year) among the top five, narrowing the gap with Huawei to just 800,000 units.

The main growth driver remained the iPhone 17 series. Omdia chief analyst Hou Lin previously commented that the iPhone 17 maintains the launch price of its predecessor, with upgraded storage and screen specs, and the base model's contribution to the product mix surpassed that of any previous generation.

Source / Apple official website screenshot

Another factor was government subsidies + promotions: the base iPhone 17 starts at RMB 5,999, falling within subsidy coverage, while Apple's official channels offered RMB 300 discounts on Pro and Pro Max models, directly lowering purchase thresholds across price segments and stimulating upgrade demand.

Aside from Huawei and Apple, the remaining players are all in "abandon volume, protect profit" mode, albeit to varying degrees.

Xiaomi made the most aggressive adjustments and saw the sharpest shipment contraction. According to Omdia, Xiaomi shipped 8.7 million units in China in Q1 2026, down 35% year-on-year. IDC data showed Xiaomi dropping out of the top five.

Its actions were two-pronged: first, it moved up the launch of the Xiaomi 17 Ultra — originally planned for Q1 2026 — to December 2025, aiming to lock in higher-margin sales early and create room for strategic contraction in Q1.

Second, it slowed the shipment cadence of low-to-mid-end Redmi devices and raised prices on some models starting April 11. A former Xiaomi channel distributor said that even before the price hikes, Xiaomi had already restricted shipments of loss-making models. Earlier price increases for the Redmi Note 15 series Pro/Pro+ versions already hinted at margin pressure on Xiaomi's low-to-mid-end product lines.

OPPO and vivo took a middle path: not broadly raising prices nor drastically cutting volumes, mainly offsetting costs through product mix adjustments, at the cost of a slight shipment decline.

OPPO shipped 11 million units in China in Q1 2026, down 3% year-on-year. This was the first quarter since realme was officially consolidated into OPPO's statistical scope. Its strategy was tiered price increases: in March, it raised prices on the entry-level A series, mid-range K series, and OnePlus models by RMB 200–500, while keeping the high-end Find series and mid-to-high-end Reno series unchanged.

vivo shipped 10.5 million units in China in the same quarter, roughly flat year-on-year. Its strategy was similar to OPPO's but executed more conservatively: only small price increases or spec reductions on low-to-mid-end models, while the high-end X300 series kept its pricing. One reason is that its high-end push is showing results. The IDC report noted that thanks to the X300 series and iQOO 15 series, vivo ranked among the top three domestic players in the above-$600 high-end market. High-end profits provided a buffer for cost fluctuations in low-to-mid-end products.

02. Xiaomi, OPPO, vivo, Honor, Transsion — All Seek Fortunes Overseas

The domestic market is already a highly zero-sum game: in Q1 2026, the top six vendors together captured 94% of the market.

Unable to outcompete at home, naturally they look outward. Omdia data shows global smartphone shipments of 1.25 billion units in 2025, with China accounting for 282 million units or 22%. That means 78% of global shipments are outside China.

But overseas battlegrounds are also challenging. In Q1 2026, Chinese brands in the global top five all faced pressure. IDC data shows Xiaomi, OPPO, and vivo all declined, with the three combined losing nearly 13 million units in shipments.

Xiaomi saw the largest drop (down 19.1% year-on-year) but still held onto third place globally. IDC noted that Xiaomi "strategically reduced shipments of older models to avoid sharp price increases," consistent with its domestic "profit over volume" strategy.

However, regionally, Xiaomi faced headwinds in multiple markets: it held share in Europe but growth stalled, exited India, and relied on POCO in Southeast Asia. Xiaomi's biggest global bright spot remains its position as the largest Chinese player in Europe, where it shipped 21.8 million units in 2025, ranking third.

OPPO's global share fell 9.9%. Its domestic fundamentals stabilized, but international markets dragged it down. The core reason: OPPO and realme's overseas volume models are concentrated below $200 (approx. RMB 1,300–1,400), where storage price increases hit hardest, and consumers in emerging markets are most price-sensitive, so price hikes directly hurt sales.

Nevertheless, integrating realme shouldn't be judged solely by one quarter. OPPO bringing it into the fold is essentially a case of huddling together for warmth during an industry winter: the combined purchasing scale of the three brands (OPPO, OnePlus, realme) gives them better bargaining power with upstream storage vendors, while also allowing them to streamline overlapping competition in the RMB 2,000–3,000 price segment and concentrate resources on core battlefields.

vivo's global decline was 6.8%, the smallest among the three Chinese brands. The reason is that its shipment markets are highly concentrated: China, India, and Southeast Asia together account for over 90% of its global sales.

The risk is equally clear: when both China and India (its main markets) are under pressure, vivo lacks other markets to share the risk in the short term. Omdia 2025 data shows vivo did not rank in the top five in Europe, Latin America, the Middle East, or Africa. Whether it can break free from "Asia-Pacific dependency" depends on its performance in new markets like Brazil and Europe.

Beyond these three, two other Chinese manufacturers deserve attention.

Honor was the fastest-growing major vendor globally this quarter. IDC's Q1 2026 report noted that Honor's year-on-year growth reached 24%, the highest among the global top ten.

Honor's approach is distinctive: it doesn't get bogged down in China's stock market but focuses resources on overseas expansion; it doesn't compete on value-for-money overseas but targets the $300–499 mid-to-high-end segment. In 2025, Honor ranked fourth in Latin America, the Middle East, and Africa respectively.

Transsion still didn't make the global top five this quarter, with its 2025 shipments down 8% year-on-year (Omdia data). The "King of Africa" continues to see its turf eroded: in Q4 2025, its African market growth was just 3%, while Samsung and Honor grew 27% and 88% respectively in the same period. Facing supply chain shocks and intensifying competition, Omdia expects Transsion's African market to decline 23% in 2026.

It's worth adding that Huawei is still in a recovery phase overseas. Its global ranking in 2025 was around seventh (Omdia data), and overseas is not its main battlefield in the short term.

03. Three Key Thresholds Determine Winners: Cost Structure, Supply Chain, and Brand Power

A notable signal: in Q1 2026, Huawei and Apple together captured 39% of the Chinese market — the highest combined share for Huawei since sanctions began.

Why, amid widespread cost pressures, does share accelerate toward the top players? The core reason lies in cost structure. Industry estimates show that for low-end phones below $200, storage accounts for over 30% of BOM; for high-end phones above $800 (approx. RMB 5,700), that proportion is under 10%.

This means that faced with a 90% rise in DRAM, a low-end phone would need a 40%–50% retail price increase to maintain margins; a high-end phone would only need a 5%–8% increase, or manufacturers could absorb it themselves. The impact of storage price hikes on different price segments is orders of magnitude apart.

Apple's products are predominantly above $800, and Huawei's ASP (average selling price) in China exceeds RMB 4,000. Both focus on the high end, where cost impact is minimal and pricing headroom ample.

It's worth noting that IDC data shows Huawei's Pura X, priced above RMB 10,000, shipped over 1.5 million units in Q1. "Huawei's foldable shipments exceeded the combined total of the other three vendors," said the channel research source. The volume growth of high-margin foldables is one reason Huawei withstood storage cost pressure.

vivo and OPPO are in the middle tier, mainly relying on profits from high-end product lines to subsidize low-to-mid-end pressure.

Xiaomi's shipment base is predominantly below $200. The former Xiaomi channel distributor said its main models have thin profit margins, making it difficult to absorb cost increases, so it proactively cut low-to-mid-end shipments and focused on high-end to protect profits.

Transsion is in an even more passive position, with 81% of its global shipments concentrated below $200, making it the most vulnerable player in this round of storage price shocks.

Beyond price segments, inequality in procurement costs and access to supply further magnifies the gap between vendors.

The global storage market is dominated by Samsung, SK Hynix, and Micron. A supply chain source told DingJiao One that large customers have long-term lock-in contracts, while smaller customers transact on the spot market, where price increases are much larger than contract prices.

Samsung phones can use its own storage, giving it a natural cost advantage. "Apple is the largest end customer globally by procurement volume, with long-term contracts covering most of its purchases, so it's less sensitive to spot market fluctuations," the supply chain source said.

Huawei's situation is somewhat special: its localized supply chain (YMTC, CXMT) helps it avoid direct impact from international spot markets.

Xiaomi, OPPO, and vivo have comparable supply chain positions. LPDDR5 for high-end phones is relatively adequately supplied, but the LPDDR4X heavily used in low-to-mid-end phones is exactly the model facing the most severe shortage and the sharpest price increases.

Omdia summarized in its report: "Vendors with smaller scale, limited long-term supplier relationships, high demand for LPDDR4/4X, and a large proportion of low-end models will face greater risks."

In terms of price segment structure and supply chain position, Xiaomi is the most affected, followed by OPPO and vivo.

Beyond these two factors, brand power and ecosystem lock-in will also determine the way forward. In other words, "after price increases, will consumers still pay?"

"Even if Huawei raises prices, it has the HarmonyOS ecosystem and in-house chips to back it up," the channel research source said. IDC data shows HarmonyOS NEXT already accounted for 12% of China's smartphone OS market in Q4 2025. Many consumers buy Huawei for an increasingly complete ecosystem, raising switching costs.

For other brands raising prices in the Chinese market, sales will be affected to some extent.

Synthesizing these three variables, the industry direction for 2026 is already quite clear. Omdia forecasts global smartphone shipments to decline about 7% year-on-year in 2026, and if storage prices continue rising into the second half, the decline could expand to 15%. IDC's assessment is more pessimistic: memory chip shortages are expected to last at least until the second half of 2027.

Ryan Reith, Group Vice President for IDC's Worldwide Client Device Trackers, said: "Vendor scale and supply chain control will become critically important. Top players are better positioned to secure stable supply and relatively manageable costs."

In this winter, each player's core strategy is becoming clear: Huawei and Apple stick to the high end, turning cost pressure into an opportunity to clear the battlefield; Xiaomi accelerates shifting its shipment focus to the mid-to-high-end digital series; OPPO's product line integration will take time, making 2026 more of a digestion period; vivo's key variable is India — if its home market continues to be pressured, it must accelerate breakthroughs in Europe and Brazil; Honor's test is whether its high growth can continue when Samsung and Apple also step up their mid-to-high-end push in emerging markets.

The past decade has been a survival-of-the-fittest for Chinese phones: from over 100 brands in 2015 down to six mainstream players today, with over 90% of brands completely eliminated. Going forward, the impact of storage price hikes, the pace of AI phone adoption, and overseas localization capabilities will continue to reshape industry rankings.