The global component crisis is hitting the mobile phone industry hard. Affected by the shortage of DRam memory and soaring costs, the Chinese giants Xiaomi, Oppo and Vivo have just cut by nearly 30% their production forecasts for the year 2026. A situation that paradoxically benefits Apple and Samsung, whose premium positioning makes it possible to absorb, in part, the rise in prices.
The fate of each smartphone maker is far from similar… Eight days barely after Apple’s decision to raise its prices, citing a surge in memory chip prices, the storm is hitting mid-range brands. The collateral damage is now hitting Asian manufacturers hard. Far from a simple drop in demand, it is the physical and financial inability to source components that is now dictating the harsh law of the market.
Severe cuts in production
According to recent information from our colleagues at Nikkei, Chinese principals have had to resign themselves to making deep cuts to stem the bleeding. After an initial trimming of 15% to 20% at the very start of the year, the second wave of revisions is painful. Consider this: Xiaomi, which was cruising toward 170 million devices sold in 2025, had first adjusted its target to 135 million. The manufacturer is now warning its suppliers of a volume revised to 95 million units, with the risk of an additional decline if the logistics outlook does not brighten. The situation is just as bitter at Oppo and Vivo, with forecasts now below the 90 million mark, while Honor admits it can no longer keep up with last year’s frantic pace. In eighteen months, the world’s third-largest player is thus giving up more than 40% of its volume. A real rout!
A boulevard for the Premium segment
The explanation for this programmed debacle is purely mechanical. In the premium segment, heavyweights like Apple and Samsung Electronics are solid enough to secure their stocks, even if that means passing the extra cost on to the final bill or trimming comfortable margins. By contrast, the Chinese Android ecosystem, highly dependent on price-sensitive customers, finds itself in a pricing impasse. Raising the sticker price would drive buyers away, and producing at a loss is unthinkable. The only rational way out is therefore to slam the brakes on assembly lines. IDC’s gloomy forecasts, which anticipated a 13.9% decline in overall sales, are now materializing in the harshest possible way. The Android market alone is expected to plunge by 21% in the current fiscal year.
No respite in sight before 2027
This resource crisis, typical of shortage cycles, first hits the entry-level and mid-range segments before inexorably affecting every link in the value chain. And the outlook is hardly encouraging. Gartner analysts are already pushing any normalization in DRam memory prices back, at best, to the end of 2027.
