Smartphone flagship prices are expected to rise by around 10% in 2026, driven primarily by surging costs in key components like memory and RAM. This increase will affect the launch prices of new models from major brands such as Xiaomi, Samsung, and Apple.
Xiaomi’s upcoming flagship, the Xiaomi 17 Ultra, set for release early next year, is anticipated to be the first affected by this price hike. Xiaomi Group President Lu Weibing recently indicated that rising memory prices, boosted by AI-driven demand, are the main reason behind these changes.
Memory costs have surged sharply since late 2022 and continue to climb through 2025, with projections showing this trend persisting until 2027. This situation is largely attributed to global chip shortages and disruptions in semiconductor supply chains. According to research from Counterpoint, the average selling price (ASP) of smartphones worldwide could increase by 6.9% in the coming year.
Counterpoint’s Research Director, MS Hwang, revealed that mid-to-high-end smartphones have seen a 10% to 15% rise in material costs. He warned that memory prices alone might jump another 40% by the second quarter of 2026. This would cause the bill of materials (BoM) costs to rise between 8% and more than 15% from current peak levels. Ultimately, these increased costs will be passed on to consumers, pushing retail prices higher.
Apple and Samsung are considered better positioned to absorb and manage these cost pressures due to stronger financial resilience and greater flexibility in maintaining profit margins. Other manufacturers, especially Chinese companies that compete primarily on price in the mid-range segment, may face more difficulty balancing market share and profitability.
### Xiaomi 17 Ultra Price Impact
The predicted price shift is already visible with Xiaomi’s flagship lineup. The Xiaomi 15 Ultra was priced at about 6,499 yuan (around $930). The Xiaomi 17 Ultra is forecasted to launch at approximately 6,599 yuan (about $945), marking a near 10% increase. Though the price rise seems modest percentage-wise, it signals a notable market shift after several years of stable flagship pricing despite improving specifications.
Such an increase is expected to ripple through the industry, encouraging other smartphone makers to revise their flagship pricing, especially for devices featuring ultra-high-resolution cameras and cutting-edge technology.
### Industry Responses to Rising Component Costs
Manufacturers are likely to adopt various approaches to offset material expenses without drastically raising prices. Counterpoint’s analysis suggests some brands may cut costs by using less expensive camera modules, display panels, or audio components.
Other cost-saving tactics could include reusing components from previous generations or limiting design changes to keep production expenses in check. These strategies aim to sustain competitiveness in a price-sensitive market.
Additionally, companies may boost promotions, trade-in programs, and other incentives to encourage consumers to upgrade to the newest flagship despite higher price tags. The mid-range smartphone segment could witness intensified innovation, particularly from giants like Samsung, striving to retain value without transferring full cost increases to buyers.
Meanwhile, semiconductor foundries such as TSMC have also raised chip prices, compounding the challenge for smartphone manufacturers. Consumers planning upgrades in 2026 might need to prepare for a higher budget or consider buying previous-generation flagship models or phones from brands offering strong specifications at lower prices.
Rising flagship prices mark a significant shift in the smartphone market, compelling both producers and buyers to adapt to a new norm of more expensive high-end devices influenced by ongoing tech and supply chain pressures.
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