Huawei Announces Fresh Round of Smartphone Price Increases Amid Memory Chip Crisis

TLDR

Table of Contents

Chinese tech giant prepares to implement additional smartphone price increases citing escalating memory component expenses
Production costs for Huawei smartphones have risen approximately $200, according to executive Richard Yu
Company forecasts the elimination of budget smartphones under $200 from global markets by decade’s end
First-half profits declined 36% year-over-year
Strategic expansion of flagship device sales planned for Middle Eastern and European territories

Huawei Technologies has announced plans to implement further smartphone price adjustments. The Chinese manufacturer attributes this decision to escalating memory component expenses.

Huawei plans to join rivals in raising smartphone prices to counter rising memory costs, betting on a chips-to-software edge to protect its lead while it explores markets abroad https://t.co/gh3nLdfMjt
— Bloomberg (@business) October 1, 2026

Richard Yu, who leads Huawei’s consumer division, delivered these remarks during a media briefing this week. The announcement came from the company’s headquarters in Shenzhen.

According to Yu, manufacturing costs for each Huawei smartphone have already increased by approximately $200. The executive did not specify the timeframe over which this cost escalation occurred.

“Price adjustments will be necessary moving forward, although we intend to keep them moderate,” Yu stated. He emphasized that these escalating expenses are significantly impacting profitability.

Memory Component Shortage Transforms Industry Landscape

Memory chips serve as data storage components in devices such as smartphones. Pricing for these essential components has experienced significant inflation throughout the year.

This trend has elevated production expenses across the entire smartphone sector. Competitors including Apple and Xiaomi have already implemented price adjustments citing identical challenges.

Yu maintains that these price pressures may actually benefit Huawei’s market position. He suggested that budget-focused manufacturers will face greater difficulties than his company.

Analytics firm Counterpoint Research projects that approximately 230 million smartphones in the sub-$200 category will disappear from global markets before 2030.

“Lower-tier product demand will experience additional compression, pushing the entire industry toward mid-range and premium segments, areas where Huawei demonstrates particular strength,” Yu explained.

Chinese consumer appetite has remained subdued throughout this year. Counterpoint’s data indicates that weekly smartphone transactions in China have declined by double-digit percentages versus the previous year, a pattern emerging since July.

Huawei’s financial performance has reflected these market headwinds. Net income tumbled 36% during the first six months of this year.

A portion of this decline resulted from Huawei’s strategy of stockpiling raw materials in advance. The company implemented this approach to shield itself from anticipated cost escalations.

Telecommunications infrastructure and consumer electronics each contribute approximately 40% of Huawei’s overall revenue. These divisions represent the core of the company’s operations.

Foldable Device Segment Fuels Huawei’s Market Expansion

Huawei has maintained stable pricing throughout this year thus far. In contrast, competitors Xiaomi and Oppo have implemented repeated price adjustments.

Yu indicated that this pricing strategy is successfully attracting additional customers. Market data supports this assertion.

Huawei anticipates smartphone shipment growth of approximately 8% this year. Meanwhile, other Chinese smartphone manufacturers may experience shipment declines as steep as 34% during the identical period, based on Counterpoint projections.

Foldable devices have emerged as a significant growth catalyst. Yu noted that Apple’s entry into the foldable segment has paradoxically benefited Huawei.

Following Apple’s foldable iPhone launch, Huawei’s Pura X Max experienced a 76% sales surge. The $1,650 device has already shipped 1.4 million units.

Huawei also markets a tri-fold device designated the Mate XT 2. With pricing beginning at $2,980, the company targets sales exceeding one million units this year.

Huawei intends to expand premium device distribution beyond Chinese borders. The Middle East and Europe represent primary targets for this expansion initiative.

The company continues recovering from American sanctions that severed relationships with chip and software providers including Google. Those restrictions compelled Huawei to develop its proprietary operating system, HarmonyOS.

HarmonyOS has powered Huawei devices in China since 2021. The company projects 100 million users by year’s end.

Huawei now intends to deploy HarmonyOS on devices sold internationally in upcoming years, replacing Android on those products.