The global shipment of smartphones priced below $100 has seen a dramatic decline, with a nearly 60% drop in the second quarter of 2026 compared to the previous year, according to IDC data. This shift is particularly pronounced in China, where Xiaomi's share of sub-$100 devices plummeted from 27.7% in the first half of 2025 to just 11.2% a year later.
The rising costs of memory, which now constitute almost 60% of the bill of materials for smartphones priced under $200, are largely attributed to chipmakers focusing on higher-value products for AI infrastructure. As a result, manufacturers are increasingly moving up-market, with Xiaomi's average selling price rising approximately 30% since 2023 to $197, while Oppo's has reached $300.
The trend indicates that low-end phones are becoming less viable to produce, prompting manufacturers to eliminate these models from their offerings. Xiaomi's recent launch of the premium 18 Fold, priced at 10,999 yuan ($1,640), exemplifies this strategic shift.
Despite some ability to offset costs through internet services and app revenues, analysts suggest that prices are unlikely to revert to earlier levels, as memory manufacturers lack incentives to increase capacity for low-end devices