Something unusual happened in the Chinese smartphone market in May. Apple quietly cut the iPhone 17 series price by around $96 and the iPhone 17 Pro series by around $138 in the middle of the night. By morning, the entire market was reacting. Huawei dropped its foldable Mate X6 by roughly $413, bringing it to around $1,374. Xiaomi announced a $206 reduction on the 15 Ultra. Honor, OPPO, and others followed with their own cuts ranging from $55 to $179. In less than 48 hours, every major smartphone brand in China was discounting aggressively, and the trigger was a single Apple price adjustment.
The timing was calculated. China's 618 shopping festival, the country's second-biggest retail event after Singles Day, was approaching. Apple moved first and everyone else had no choice but to respond or watch sales evaporate. When combined with trade-in programs and platform subsidies on JD.com, the iPhone 17 Pro dropped to as low as around $963, its lowest price ever. Consumers who had been sitting on upgrade decisions for months suddenly had a window that felt genuinely limited.
The reason that window feels limited is real and not just marketing. Memory chip prices are rising at a pace the industry has not seen before. The cost of memory semiconductors in a smartphone's bill of materials has climbed from around 10 percent to as high as 30 to 40 percent in mid-range models. Memory has overtaken processors as the single most expensive component inside a phone. Lei Jun, Xiaomi's founder, stood on stage at the Xiaomi 17 Max launch and told the audience directly: if you are planning to buy a new phone in the next year, buy it now. Xiaomi's president added that some domestic Android flagships could cross the $1,374 mark in the second half of 2026. Micron Technology has stated the memory shortage is unlikely to ease before 2028.
Several industry insiders described 618 as the last buying window of the year before prices climb further. National consumer subsidies in China are covering 15 percent of the cost on phones and digital products up to around $825, with a cap of roughly $69 per item. That subsidy combined with brand-level price cuts created a short period where buying made more financial sense than waiting.
Apple handled this environment better than anyone else. Its gross profit margin on hardware sits around 38.7 percent, giving it room to cut prices without bleeding. Domestic Android brands are operating on margins below 15 percent in many cases. Xiaomi's smartphone gross profit margin fell to 8.3 percent in the fourth quarter of 2025. When Apple discounts, it can absorb the hit. When everyone else follows, they are cutting into margins that were already thin. There are also reports that Apple has been buying up available mobile DRAM at premium prices specifically to constrain supply for competitors, a strategy that puts further pressure on brands already struggling with component costs.
Huawei's price cuts on its foldable lineup tell their own story. The Mate X6 dropping by $413 is not a routine promotion. Apple's first foldable iPhone is reportedly in final testing and expected alongside the iPhone 18 series this September, with sales beginning in October. Huawei is clearing ground before that product arrives.
The offline retail market is feeling all of this most acutely. A distributor who once operated nearly 60 stores across four brands has trimmed down to Huawei and Samsung only. Store staff are offering discounts that go beyond official pricing just to move inventory. IDC projects global smartphone shipments will fall 12.9 percent year on year in 2026 to 1.1 billion units, the lowest since 2013. In China specifically the drop is expected to reach 10.5 percent, a new low since 2012.
Consumers have noticed the trajectory and adjusted accordingly. The phrase circulating among Chinese buyers right now translates roughly to patching it together for another three years, meaning people are repairing and holding onto existing phones rather than upgrading. Second-hand phone sales are climbing. The average phone lifespan has crossed 48 months. Brands are discounting to stimulate a market where buyers have simply decided to wait, and the only brand that seems to move that calculation consistently is Apple.
