AI越火 廉价手机越“卖不动”了

This article outlines the current slowdown in global low-cost smartphone sales and its core drivers. Key takeaways are as follows:

1. The AI boom has driven up global memory chip prices. For entry-level smartphones priced under $200 wholesale, memory accounts for 43% of total bill of materials (BOM) costs. That has forced low-cost handset makers to raise prices to break even, but price-sensitive consumers in emerging markets have largely rejected higher prices, directly suppressing upgrade demand and causing a sharp drop in low-cost smartphone sales. This round of memory price hikes is expected to last through 2027, and potentially even 2028.

2. Smartphone sales are now declining across major high-growth emerging markets including the Middle East, Southeast Asia, Africa, and Latin America. Full-year sales are projected to drop 22% in the Middle East and 28% in Africa. Only a small number of brands such as Honor have managed to grow against the trend thanks to their established local channel networks, though their long-term outlook remains uncertain.

3. Most mainstream smartphone makers have responded uniformly by cutting low-end, low-memory product lines and shifting their overall portfolio toward mid-range and premium models. They now prioritize protecting profit margins and cash flow over chasing blind sales growth.

This article outlines the latest shifts in the global smartphone market, particularly in emerging markets, with key takeaways for brands as follows:

1. Consumer trends: The golden era of growth in emerging markets, once the main engine of global smartphone expansion, is over. The vast majority of consumers in these regions are extremely price-sensitive, so price hikes have directly suppressed upgrade demand, leading to a sharp contraction in demand for low-cost entry-level phones. Mid-range and premium models have seen far less impact. Full-year sales are projected to drop more than 20% across multiple major emerging markets.

2. Product and pricing: AI-driven memory price hikes have completely squeezed profit margins for entry-level phones, pushing the entry-level device business model close to a breaking point. Brands need to proactively cut low-end, low-memory product lines and shift their product mix toward mid-range and premium models, balancing price increases against sales volume, and prioritizing profit margins and cash flow.

3. Growth opportunities: The old industry order is breaking down. Leading brands can capitalize on the shift to increase investment in brand building and channel expansion to gain market share. Honor's counter-cyclical growth across multiple emerging markets serves as a clear example.

This article analyzes the latest changes in the smartphone industry in emerging markets, with key insights for mobile sellers as follows:

1. Risk warning: The golden era of high growth in emerging markets is over. All major markets including the Middle East, Southeast Asia, Africa, and Latin America are facing sales declines: full-year sales are projected to drop 22% in the Middle East and 28% in Africa, and the downturn in Latin America could last through the first half of 2027. Even after price hikes, low-end phones remain difficult to ship, with weak end-consumer demand and heavy inventory pressure.

2. Demand shifts: Consumers in emerging markets are extremely price-sensitive, so price hikes have directly crushed demand for entry-level devices. The low-cost handset segment is no longer profitable, while demand for mid-range and premium models remains relatively stable and far less affected.

3. Strategy and opportunities: Sellers can proactively exit the new entry-level phone segment and shift to selling mid-range/premium models or used smartphones, adjusting their business structure to prioritize profit. During this period of industry restructuring, leading brands are expanding against the trend. Sellers with resource advantages can partner with these expanding leading brands to unlock new growth opportunities.

This article analyzes ongoing structural changes in the smartphone industry, with key insights for handset manufacturing suppliers as follows:

1. Shifts in production demand: Driven by AI-related memory price hikes, demand for cheap entry-level phones has evaporated. Major smartphone brands are already cutting low-end, low-memory product lines and shifting en masse to mid-range and premium models with larger memory capacities. Manufacturers need to quickly adjust their capacity structure: reduce capacity allocation for entry-level models and add capacity to support mid-range and premium large-memory devices.

2. Business opportunities: The old industry order is breaking apart, and leading brands are expanding their channels against the overall trend, driving a clear increase in order demand for mid-range and premium large-memory models. Factories with aligned capacity can partner with expanding leading brands to secure more stable, long-term orders.

3. Transformation insights: This round of memory price increases will last through 2027, and potentially 2028. The entry-level segment will remain unprofitable for the long term, so factories need to adjust their production lines and supply chain layouts early, while advancing digital management to cut costs and better navigate industry volatility.

This article outlines the latest trends in the smartphone industry, with key insights for mobile industry service providers as follows:

1. Industry trends: AI growth has pushed up memory costs and driven a structural shift across the smartphone industry. The low-cost entry-level segment is shrinking rapidly, and the old "low margin, high volume" growth model that long dominated emerging markets is completely obsolete. The entire industry has shifted to a new growth model focused on protecting profits and stabilizing cash flow, and a broad industry shift to mid-range and premium products is now a certainty.

2. Core client pain points: Brands and retail sellers now face the complete elimination of profit margins in the entry-level segment, with rising memory costs continuously squeezing profitability. They also face falling end demand in emerging markets, weak in-store sales after pre-positioning channel inventory, heavy inventory pressure, and a lack of clear paths to growth.

3. Business adjustment: Service providers can shift their service focus from supporting entry-level supply chains and channels to focusing on services for mid-range and premium devices. This includes helping brands optimize inventory management and connecting them with channel resources for mid-range and premium models, aligning with industry upgrade trends and capturing opportunities from industry restructuring.

This article outlines current trends reshaping the smartphone industry, with key insights for smartphone marketplace platforms as follows:

1. Shifting demand: Existing entry-level phone sellers are gradually exiting the market, while leading mid-range and premium brands are expanding against the trend. Platforms need to adjust their recruitment focus to prioritize onboarding mid-range and premium brands and high-quality sellers, optimizing their category mix to align with the industry upgrade trend.

2. Operational adjustments: Emerging markets are broadly facing challenges of pre-positioned channel inventory and weak end demand. Platforms can launch targeted inventory-focused marketing campaigns to help sellers reduce inventory pressure, while rolling out favorable policies to attract expanding leading brands to onboard, growing platform scale alongside these brands' expansion.

3. Risk mitigation: Platforms need to guard against the risk of broad-based demand declines in emerging markets. They should avoid blindly allocating traffic and policy support to entry-level phone sellers, instead adjusting category traffic allocation to prioritize supporting mid-range and premium categories, and controlling operational risks stemming from the industry downturn.

This article reveals the latest shifts in the global smartphone industry, with key insights for industry researchers as follows:

1. New industry dynamics: AI development has generated spillover structural impacts on the smartphone industry. AI-driven growth in memory demand has pushed up memory prices, forcing an industry-wide product upgrade. The low-cost entry-level segment is on the brink of elimination, the old "low margin, high volume" growth model for emerging markets is completely obsolete, and the golden age of emerging market growth is officially over.

2. Unaddressed new issues: The benefits of AI growth are currently concentrated in upstream memory chip companies, while downstream handset makers focused on entry-level emerging markets have absorbed all the cost pressure, making low-cost smartphones an unintended casualty of AI expansion. Additionally, the broader smartphone market slowdown has delayed digital penetration in less developed regions such as Africa, pushing back original timelines for adoption.

3. Shifts in business models and competitive landscape: The original business model for entry-level low-cost smartphones has been pushed to a breaking point, and the industry has shifted to a new survival rule of "profit margin first". A number of leading brands are expanding against the trend leveraging their established channel networks, and the competitive landscape in emerging markets is now being restructured.