Recent developments in the technology world are painting a worrying picture in the consumer electronics market. Xiaomi Group Chairman Lu Weibing issued a striking statement warning users about smartphone prices. According to the industry giant, rising component costs will lead to even more expensive price tags in the coming year.

Why are smartphone prices rising so rapidly?

The underlying reason for these price increases lies in the cost explosion in memory chip production (RAM and storage). With the rise of artificial intelligence technologies, chip manufacturers have shifted their capacity to server and data center hardware. This has led to a significant shortage in the supply of standard memory produced for mobile devices. Consequently, the imbalance between decreasing supply and increasing demand directly drives up costs.

Major memory manufacturers like Samsung and SK Hynix are dedicating their production lines to more profitable AI (Artificial Intelligence) chips. This strategic shift is causing smartphone manufacturers to face higher costs when sourcing components. Lu Weibing emphasizes that this cost increase is too significant for companies to absorb alone.

According to analysis, the prices of next-generation flagship phones could increase by 20% to 30%. This situation won’t be limited to Xiaomi; it will impact the entire industry. Unfortunately, users will be forced to increase their budgets to access higher-performance devices. While companies are striving to avoid passing this increase on to consumers, economic realities make a price hike inevitable.

So, what are your thoughts on smartphone prices? Share your thoughts with us in the comments!