Brace yourselves: Another major phone brand is signaling a price hike

Huawei’s chairman of consumer business, Richard Yu, recently told Chinese media that it expects to raise prices for its products, but only to a “moderate” extent. Yu was quoted by the media (via Bloomberg) as saying the company has been absorbing added costs of about $200, and that has been “hurting” its “profitability very badly.” Yu’s statement came alongside the launch of Huawei’s flagship Mate 90 series, which includes a special edition model going as high as CNY 18,999 (~$2,835) as well as a detachable camera with its own sensor and lens stack that supports up to 10x optical zoom.

The executive further added that increasing memory and storage costs will especially tense up the segment of sub-$200 phones, pushing consumers toward mid-range and high-end products. This shift could shield Huawei, as it primarily deals in premium and sub-premium products, even in its home turf, China. This coincided with a recent report from Counterpoint Research predicting that increasing component costs would wipe out a colossal chunk — 230 million units, to be precise — of sub-$200 phones by the year 2030, with volumes expected to fall roughly 40%.

In addition to China, Huawei is also looking to expand sales in the Middle East and Europe, though getting consumers to switch to its own proprietary OS, Harmony OS, remains a monumental challenge, regardless of its impressive hardware innovations. To make up for some of the lost revenue, Huawei is trying to cut into manufacturing chips for AI, hoping that gives it an edge over other smartphone brands.