Storage Price Hikes Reshape Premium Smartphone Competition: Rebalancing Price, Specs, and Business Targets

Key Takeaways

Memory and storage have entered a price-up cycle, forcing premium smartphone makers to rebalance between raising prices, holding prices, and re-cutting configurations.

Across a Sandalwood China e-commerce sample of 19 generational product lines and 65 current SKUs priced above RMB 4,000, about half moved entry and top specs up together; the rest held prices or restructured configurations.

Four strategies emerged: raise entry and top specs together; cut entry while upgrading the top spec; hold core specs unchanged; or rebuild the line-up and main selling tier via SKU restructuring.

No strategy is inherently better — what matters is whether it serves the vendor’s goal (grow the premium base, lift ASP, defend margin, optimise inventory) and balances volume, price, profit and user scale.

01 Under cost pressure, premium-market players take four postures

Different vendors split on how to respond

As memory and storage enter a price-up cycle, cost pressure travels down the supply chain to handset pricing, and the once-stable system of pricing and configuration begins to break down.

For the whole industry this is a shared dilemma — raise, hold, or reconfigure. For the premium segment, it is above all a stress test of brand premium.

Mid- and low-end products compete mainly on value-for-money and cost efficiency. A premium phone’s price, by contrast, must be held up by brand power, flagship positioning, leading specs and a complete experience all at once: a straight price hike raises the barrier to upgrading; trimming specs can dilute flagship value; holding the price erodes margin.

With memory and storage costs climbing, the support under premium prices faces a direct test. Vendors broadly fall into four postures:

Offensive (active) — leaning on brand, product or cost advantage to proactively expand the premium user base or push the brand upmarket.
Defensive (passive) — passing costs through via routine price hikes, prioritising margin and the existing positioning.
Offensive (passive) — holding core prices steady, using price stability to look more attractive when rivals are all raising prices.
Repositioning — restructuring configurations and SKUs to redefine the product’s entry threshold, main selling position and target users.

Behind these strategies lie differences in each vendor’s brand pricing power, product value, ability to absorb cost, and product-line management.

Per Sandalwood China e-commerce data, focusing on the premium sample above RMB 4,000 — covering 19 generational product lines and 65 current SKUs — a spec-by-spec, price-by-price comparison shows four main responses:

10 models raised entry and top specs together — 53%;
4 models cut or held the entry price while upgrading the top spec — 21%;
2 models kept core specs at essentially unchanged prices — 11%;
3 models restructured configurations to rearrange the price ladder — 16%.

02 Strategy One — Raise entry and top specs together: the whole price band moves up

vivo drops the 16GB + 256GB version

This is currently the mainstream play in the premium market. A higher entry raises the threshold, a higher top spec widens the premium, and the middle variants follow — a continuous ladder that signals “the whole generation is worth more.”

Take the vivo X300s: the entry price rose RMB 800 and the top spec rose RMB 1,500, with the higher spec carrying more of the premium.

vivo’s focus is to use the generation refresh to lift the price anchor of the entire X series upward, while loading more premium onto the high-spec versions.

Dropping the 16GB + 256GB SKU reduces cross-shopping between low-storage variants and steers demand toward 512GB and above, lifting the value contribution of the main selling and top configurations.

The downside risk: a higher starting price may first bleed price-sensitive users.

03 Strategy Two — Cut or hold the entry, upgrade the top spec: widen coverage without an across-the-board cut

Huawei: “lower the threshold, upgrade the top spec”

This approach widens user coverage with a more attractive base model, then uses a high-memory top spec to keep the flagship height. It is not a line-wide price cut — it stretches the price band at both ends.

Take the HUAWEI Pura 90 Pro: the existing 12GB versions were repriced lower, while a 16GB version rebuilds a new top-spec tier.

Huawei’s focus is “lower the threshold, upgrade the top spec”:

Both 12GB versions dropped RMB 1,000, expanding the Pura Pro user base;
The 12GB + 1TB was dropped, with high-spec demand taken over by 16GB versions;
The new-generation 16GB + 1TB is RMB 500 below the previous-generation 12GB + 1TB.

The intent is to lift appeal through “higher specs, lower prices” — widening coverage while defending the premium position.

04 Strategy Three — Keep core specs at roughly unchanged prices: use stability to lower the upgrade barrier

HONOR holds Magic Pro’s existing price perception

When a product already sits at a high price point, further hikes can hit demand directly. Some vendors therefore hold prices on their core configurations, only adding or dropping a few variants to refine the line.

Take the HONOR Magic8 Pro: it extends the main price anchors and adds a 12GB + 512GB to fill the middle tier.

HONOR’s focus is to hold Magic Pro’s existing price perception and fill the price tier around RMB 5,999.

With the new 12GB + 512GB, users stepping up from the base model to larger storage no longer have to jump straight to a 16GB version — the spec choices become smoother.

It prioritises upgrade acceptance and price stability, but also means more of the cost must be absorbed through product upgrades, the supply chain, or internal efficiency.

05 Strategy Four — Drop old configs and rebuild the line-up: steer users toward a new main selling tier

Xiaomi: “restructure configs, raise the starting point”

By dropping, adding or replacing variants, the price ladder is redesigned. This usually signals that the previous generation had some inefficient SKUs, unreasonable price gaps, or an insufficiently prominent main selling tier.

The Xiaomi 17 Ultra is a fairly typical case of “rebuilding the floor and the ceiling together.”

Xiaomi’s focus is “restructure configs, raise the starting point”: after dropping the 256GB version, the starting price rose RMB 500 — but the minimum storage also moved up to 512GB, so the hike is clearly justified by the spec. The 16GB + 512GB and 1TB variants then rose RMB 500 and RMB 700 respectively, raising the price ceiling further. The intent is to reduce the drag of low-price variants on the flagship positioning, and it also helps lift the series’ average price and the profit room on high-spec models.

06 The best strategy depends on each vendor’s own business goals

Four strategies serve four goals

So the choice under rising storage prices comes back, first, to the vendor’s own business goals: is it to grow the premium user base, push the brand upmarket, lift ASP, defend gross margin, or optimise SKU structure and inventory efficiency?

Around different goals, vendors can take four approaches:

Raise prices across the line, pushing the price band up and protecting per-unit profit;
Hold core prices, sharpening relative competitiveness when rivals raise prices;
Cut or hold the entry while upgrading the top spec, widening coverage and keeping flagship height;
Restructure configs and SKUs to re-optimise the entry threshold, main selling tier and price ladder.

No strategy is inherently better. What matters is whether it serves the core business goal and strikes a better balance among volume, ASP, gross margin and user scale.