Component price pressure makes Apple look cheap
Huawei is one of Apple’s biggest smartphone competitors and has announced price increases in response to the unyielding component pricing crisis.
With Apple’s models seemingly protected against price hikes, this is good news for Cupertino.
It was also quite predictable. As component costs spiral Apple’s big advantage is ownership of the processor, which means its devices can do more while using less memory than competing devices which lack its hardware/software optimization.
Because they don’t control key aspects of hardware or software design, competing products tend to need more memory to deliver the same capabilities.
That’s where things get to be problematic as component costs increase. The non-Apple business is highly competitive, with multiple vendors selling devices that use the same basic operating systems. They also have lower global sales. The effect of this is that price competition abounds, which is what helped keep smartphone prices low.
iPhone in the middle
Apple changed this with the iPhone 17e, which is a very good phone introduced at a price that challenges the mid-range market. Its appearance meant smartphone makers in that tier had to struggle that much harder. Component price pressure makes it much harder to do so profitably.
Price rises are inevitable. Huawei will increase the prices for its smartphones, tablets, and some other products, starting on July 1.
The news follows price increases from Oppo, Vivo, Lenovo, Honor, and Xiaomi, with those price increases almost certainly helping Apple achieve 42% growth in Q1 26 in China.
Apple took 19% of China’s smartphone market in contrast to front-runner Huawei’s 20%.
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One thing these price rises should be good for is sustainability.
The best smartphone is one you keep using
Apple devices last for years, of course – just look at their steady value on the second user markets – but to some extent the rest of the industry is built around annual upgrades with devices to match.
More expensive devices will cause people to upgrade less, which will further reduce revenue and apply yet more pressure on the business model.
Apple, meanwhile, can continue to sell high-quality products that last for years at prices which will become even more attractive as brutal business realities undermine competitors.
Though it has raised prices before, the speculation at the moment suggests the company will be discreet about where and how it applies any increases across its range, if at all, while competitors flail.
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