Xiaomi's 2026 Price Hike: Memory Crunch and What It Means

The Coming Smartphone Squeeze: It's Not Just Memory Prices

The smartphone market is bracing for impact. Recent news suggests a perfect storm brewing: rising memory costs, application processor (AP) price hikes, and a generally weak macroeconomic outlook are converging to squeeze manufacturers. The question isn't if prices will rise, but how much and who will bear the brunt?

Xiaomi's Calculated Gamble

Xiaomi President Lu Weibing's recent statements are particularly telling. He's secured memory supply for 2026, but openly warns of price increases (according to ijiwei). This isn't just about passing costs to consumers; it's a strategic play. Xiaomi has been aggressively pushing into the premium market with models like the Mi 17 series, directly challenging Apple's iPhone 17 dominance. This is smart, if you can swing it. Higher component costs give them cover to further inflate prices on these "premium" models. The Redmi K90 already saw price hikes due to memory costs.

But here's the rub: Lu also acknowledges that rising memory prices will squeeze profits, potentially forcing smaller players out of the market. This is a cold, calculated assessment. Xiaomi, having secured its supply, is betting that it can weather the storm better than its competitors, consolidating market share in the process. The South China Morning Post highlights Lu's concern that domestic Chinese players will be hit hardest. Is this a genuine concern, or a veiled prediction of competitor weakness that Xiaomi intends to exploit? And what about Huawei? The article makes no mention of Huawei.

Xiaomi's Q3 revenue numbers are strong (up 22.3% to RMB 113.1 billion), and their EV unit is profitable. But let's not get carried away. A single profitable quarter for the EV unit doesn't erase the massive capital expenditure required to enter that market. It's a good sign, but not a get-out-of-jail-free card.

Samsung's Balancing Act

Samsung faces a similar, yet distinct, challenge. Soaring memory prices are a boon for their Device Solutions Division (they raised some memory prices by 30-60% this month, according to Reuters). But those same price hikes threaten the margins of their Mobile eXperience (MX) business. The Galaxy S26 launch is looming, and rising memory costs are compounded by a 25.5% year-on-year jump in Qualcomm AP expenses.

This is a classic internal conflict within a vertically integrated giant. One division's gain is another's pain. Samsung is reportedly evaluating Galaxy S26 pricing. The question is, how much of the increased cost can they pass on to consumers without losing market share to, say, a Xiaomi 17 Pro Max (if that's even the name of the phone they launch)? I've looked at hundreds of these earnings reports, and this situation is unusually precarious, especially with [News] Memory Crunch Hits Smartphones: Xiaomi Flags 2026 Price Hikes, Samsung Under Memory, AP Pressure lowering 2026 production forecasts for both smartphones (down 2% YoY) and notebooks (down 2.4% YoY).

The situation reminds me of a pressure cooker. The heat (component costs) is rising, and the release valve (consumer willingness to pay) is getting smaller. Something has to give.

The HyperOS Wildcard

Amidst all this financial pressure, there's a software angle worth considering. Xiaomi is rolling out its HyperOS 3 update to global devices, including the Poco F5, F5 Pro, and Xiaomi 12T Pro. This might seem tangential, but it's not. A smoother, more efficient OS can potentially offset some of the hardware cost pressures by extending the lifespan of existing devices. If users are happy with their current phones, they're less likely to upgrade, reducing demand and potentially easing the pressure on component prices. It's a long shot, but it's a factor to consider.

The Consumer Pays, One Way or Another

The data points to one inescapable conclusion: smartphone prices are going up. Whether it's through outright price hikes, reduced features, or the disappearance of smaller brands, consumers will ultimately bear the cost of this memory crunch. The question isn't if, but how and when that cost will manifest. And who is this HyperOS 3 update for? It is for three global phones from 2022 and 2023.