Xiaomi Moves Up-Market as Memory Costs Pressure Sub-$100 Smartphones

According to CNBC, the days of the sub-$100 smartphone may be numbered as memory costs rise, with China seeing one of the sharpest shifts in pricing. IDC data showed global shipments of smartphones priced below $100 fell almost 60% in the second quarter of 2026 from a year earlier, after 173 million units were shipped globally last year. The segment accounted for 27.7% of Xiaomi's global shipments in the first half of 2025, but that share dropped to 11.2% a year later. Chipmakers have prioritized higher-value products used in AI infrastructure, tightening supply for smartphone memory and lifting costs. Memory now makes up almost 60% of the bill of materials for smartphones priced below $200, according to Omdia's Chow Sheng Win. IDC Vice President of Client Device Research Bryan Ma said low-end phones are becoming uneconomic to manufacture. Chinese manufacturers are responding by moving up-market and trimming cheaper models from their lineups. Counterpoint Research's Neil Shah estimates Xiaomi's average selling price has risen about 30% since 2023 to $197, while Oppo's has climbed by a similar amount to $300. IDC data showed Xiaomi's sub-$200 share of shipments fell from 60% to 52.5% over the same period, and Chow said less than 20% of Xiaomi's volume in mainland China is below $200. Xiaomi this week unveiled its higher-end 18 Fold, starting at 10,999 yuan ($1,640) and aimed at the premium segment. Shah said it is difficult to see prices returning to 2024 or early-2025 levels because memory makers have little incentive to add capacity for the low end, while Ma said any easing in the memory crunch would likely only slow price increases rather than reverse them.