Emir BardakçıI’ve been following the smartphone supply chain for several years now, and what is happening now is that there is a paradigm shift. Biggies such as Xiaomi, OPPO, and vivo are cutting back their forecast for the year 2026 because of the increase in storage prices. What we know is that the prices of upstream memories are causing manufacturers to rethink their strategy for the whole year. Though Samsung and Apple are less affected due to their contracts, those brands that we go to when we are seeking value are about to experience a squeeze on their profit margins like never before.
TL;DR
- Xiaomi and OPPO have reportedly slashed 2026 orders by over 20%.
- Storage price hikes are driving up Bill of Materials (BOM) costs for budget and mid-range devices.
- Market Contraction: Analysts have lowered total 2026 production forecasts from a 2% decline to 7%.
- Global Impact: Expect price increases or spec downgrades for upcoming global releases like the POCO X8 Pro Max.
Why are Xiaomi and OPPO lowering their estimates?
As per a recent report from Jiemian News, it is seen that the upstream supply chain is presently experiencing a huge storage price hike. As a result, a number of mobile phone manufacturers have reduced their annual orders for complete handsets. Xiaomi and OPPO have significantly reduced their orders by over 20% and vivo has reduced orders by close to 15%. The effects are most pronounced in the mid-to-low-end market.
Companies like Transsion, which is a behemoth in international markets, have reduced their target to less than 70 million units a year. It is a result of a cutback in international products for which the profit margin is already slim. If storage costs increase, they have no other option but to cut down or increase the price.
Will the POCO X8 Pro Max be affected?
We are anticipating the arrival of the “REDMI Turbo 5 Max” in the global market with the “POCO X8 Pro Max” moniker. Historically speaking, the global “XIAOMI” and “POCO” smartphones come with smaller batteries compared to those in China, and this year may see an increase in costs resulting in even smaller batteries. If you are expecting the arrival of the new devices then be advised that the pricing may change. Although these handsets are packed with the latest Snapdragon 8 Elite or MediaTek processors, the memory and storage components are the costliest aspects of the device.
The Huawei and Samsung exception
Huawei and Samsung have What is interesting is that not all companies are withdrawing. Samsung and Apple are not affected so severely since they are in better control of their own supply chains or have fixed pricing. On the other hand, Huawei is using its own supply chain in China to keep its profit margins intact. They are even talking about lowering prices for their Pura and nova models to scoop up market share from the faltering giants.
Lenovo is also rumored to be increasing shipment estimates to satisfy the demand that is not being met in the North American carrier market, but for the rest of us, smartphone production is expected to slow down significantly, starting from Q2 2026, according to TrendForce estimates, resulting in fewer new models and more expensive ones being released into the market.
What’s next for the smartphone market?
We’re probably on the cusp of “specification downgrades.” So, do not be shocked if the storage capacity on mid-range smartphones remains at 128GB or 256GB instead of bumping up to 512GB, like what we’ve been hearing before.
TrendForce has also revised its forecast of the total smartphone output in 2026, predicting a 7% decrease. Whether you are a fan of the Xiaomi HyperConnect set of features or simply looking for the new budget champion, the truth remains the same: in the year 2026, the cost of technology will increase.
