Counterpoint: China smartphone sales fell 13% YoY during the 618 shopping festival as brands raised prices to offset memory costs; Honor fell 33% and Xiaomi 24%
Smartphone sales in China fell 13% year-on-year during the month-long 618 shopping festival, as brands raised prices …
Context & Ripple Effects
China’s smartphone market had already turned down in 2025 as memory shortages raised handset prices and demand weakened. The 618 result indicates that this pressure persisted even during a major promotional period.
The downturn is especially notable for Honor, which previously led the market in the related coverage, and for Xiaomi, whose sales also fell faster than the overall market during the festival.
First-order effects
- Higher memory costs are being passed through into retail handset prices, contributing to a 13% year-on-year decline in 618 smartphone sales.
- Honor and Xiaomi face an immediate volume setback: their sales fell 33% and 24%, respectively, underperforming the market-wide decline.
Second-order effects
- Brands may have less room to use festival discounts to defend unit sales while protecting margins, making pricing and product-mix decisions more consequential.
- The sharper declines at Honor and Xiaomi could create share opportunities for rivals that can better absorb component-cost pressure or sustain demand at higher prices.
Third-order effects
- If memory-driven price increases continue to suppress replacement purchases, China’s smartphone market could become more dependent on premium buyers and on brands with stronger pricing power.
- Repeated weakness across annual shipments and major sales events points to a market in which component supply conditions increasingly shape handset demand, rather than promotions alone determining volume.
The trend: China’s smartphone market is shifting from promotion-led volume competition toward a cost-constrained environment where memory pricing and brand pricing power determine demand resilience.